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Daily Archives: September 17th, 2013

Today, I bought a GBPUSD Put Option expiring 27 September 2013, at the strike of 1.5915, breakeven of 1.5826, premium of 88bps.

We are 100bps higher because of Summer’s exit from the running for the Chairmanship of the Federal Reserve.  Inspite of the recent better economic data, I believe the UK cannot afford to bear with the current exchange levels as it may prove to be rather painful and counterproductive to the economic growth for the country.

Let’s not forget that only on September 2nd, the GBP was trading at about 1.5550.

The 76% retracement level based on the 4H chart is 1.5692, this is about 134bps from the current spot rate and against the cost of the option, it is a 1.52X payout probability.