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Daily Archives: October 9th, 2013

Trade Update: 1 month put option GBPUSD expiring on 18 October 2013

You will recall that I bought another put option on the GBPUSD at the strike of 1.6115, with a breakeven of 1.5990 and premium cost of 125bps.

I really thought we were going to lose on this option as well.  Lady Luck has decided to show her beauty, the GBPUSD and the EURUSD has did an about turn southwards starting today and the current spot is now at 1.5938, so I am 52bps in the money.

Should I take profit now or wait it out alittle longer?  The political turmoil in the US surrounding the coming debt ceiling deadline on October 17th is so so unpredictable.  Should I just take profit, since, it is on the table or wait?

The 4H chart shows that the Tenkan cutting down on the Kijun, and we are now below the cloud.  The cloud is declining and so the is Chkou.  We are near the 200 day MA of 1.5873.

Decisions…………decisions………….decisions………….however, based on the technical analysis alone, I will stay with the option for alittle longer, but I am going to be following the news like a ‘hawk’.

Tonight’s FOMC minutes at 2am Singapore time and 2pm NY time, may take away support from the USD, as the Fed didn’t taper like what the markets were expecting in the last meeting.  However, if the minutes shows that the Fed is sensitized to the economy and wants to make sure it’s growing from strength to strength which is isn’t right now, then, it should be positive USD.

Trade Update: 1 week put option on the GBPUSD expiring 27 September 2013

Well, September 27th rolled around and the GBP was up up up, moving from 1.6030 to 1.6100.

You will recall that I bought a put option at the strike of 1.5915 and a breakeven of 1.5826.  The premium was 88bps.

I let the option lapse and I made a trading loss of 88bps, which is the cost of the option.

Trade Update: I month Put Option on the AUDUSD expiring 18 Oct 2013

On September 30th, I saw AUDUSD coming down to 93.00 and at the same time I felt that the floor was reached even though it pushed down to 0.9290.

I decided to sell the option and locked in the trading profits of 100bps.  Remember our entry point was 0.9500 and our option cost was 100bps which put our breakeven at 0.9400.  Essentially, it was a 1:1 payoff, though my preliminary calculations, I was betting on a 2:1 payoff, however, AUD all of a sudden became the safe haven currency because of the partial US government shutdown and also the overhanging debt ceiling deadline on October 17th.

At the same period, the EUR and GBP was rallying against the USD, which doesn’t bode well for the other put option I did on the GBPUSD.  I will give and update shortly.