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Daily Archives: October 17th, 2014

After the initial big drop starting at about 6pm Asia time from 1.6830, I decided to do a 2 week call option struck at 1.6735 after almost a 100bps, however, I felt that there was going to be a rebound.

Premum was 56bps and breakeven was 1.6791.

Unfortunately, the GBPUSD continued its slow grind southwards and by the 29th, it was at 1.6585.

So, this call option didn’t work out and we made a loss of 56bps.

Decided to execute a 2 week call option on the EURUSD with a premium of 49bps as volatility was very low.

Gave myself time for the market to come to me.

On August 27th in Asia session, the EURUSD hit a low of 1.3135, but I held onto the position, by the time the afternoon rolled around, the EUR started picking up momentum.

So I decided to square off the option at 1.3178 for a trading profit of 300bps…………Fantastic!!!!!!

Remember people, options are great in the sense that you would have rationalized taking the loss, that is, the cost of the premium when you execute the trade and that’s your maximum loss, now you have time on your side to make the maximum potential upside.

Was the flows moving south for the GBPUSD, so I decided to do a quick trade in late afternoon Asia session and London opening session.

Short the GBPUSD and squared at 1.6835 for a trading profit of 30bps.

When the MPC votes came out with a 7-2 vote to stay with 2 wanting an increase in interest rate for the UK, the GBP shot up.

I squared at 1.6675 for a trading profit of 30bps.

Later on it came down and stabilized at about the 1.6640s range.

Fundamentals and technicals was pointing to a resurgence of the GBP, so I decided to buy a one month call option expiring Oct 15th struck at 1.6160, premium of 118bps, a breakeven of 1.6278.

I squared the position on October 19th at about 5:40pm at 1.6485 for a whopping 2o7bps trading profit.

Ladies and Gentlemen………….this was a super yummy trade!!!!!!

Yesterday afternoon, the GBPUSD looked ripe for a long position, given the previous less than positive US news.  I was betting on alittle more momentum to come through to the GBP since the low of 1.5880 on Oct 15th.

So I executed a 1 day call option at the strike of 1.600, premium of 48bps and squared the position today at 1.6100 for a trading profit of 52bps.

On Tuesday afternoon was watching the GBPUSD, the Ichimoku, MA and Stochastics was calling for a short on the GBPUSD, so I did a short on the GBPUSD.

I followed the trade it about 3 hours later and squared the position at 1.5930 for a trading profit of 50bps.

Executed a 3 day call option on the GBPUSD striked at 1.6170, premium of 40bps and a breakeven of 1.6210.

As it turned out, I lost!

Well, it was purely one of those ‘gut feeling’ trades which turned out to be wrong.