Thanks to China, my AUDUSD call option expiry this Friday, August 28th will be worth nothing and I have basically lost my premium of US$3Million.
No wait a second, I didn’t. Apologies for the silence the last two days as you can well appreciate the financial markets, that is, the equity markets and the fx markets were crazy.
Given, all the bad news coming out from China; devaluing the renminbi, slowest growth in the past 5 years, PBOC cut interest rates twice and then again today, no short selling on 500 stocks in Shanghai and Shenzhen markets, lowering bank reserve ratios, buying less raw materials such as metals and ores, lowest exports in the past 4 years……………..all these pointed to China going down South!
This means SELL SELL SELL SELL AUDUSD!
So, silly me decided to be brave and stupid and chase the market, but of course with stop losses as well.
The deterioration in the AUD since last Friday from 0.7353 and downwards…………
The drop off the cliff on Monday at about 9pm Asia time, gapped from 0.7232 down to 0.7032, then, stabilising at 0.7142 and went back up to a high of 0.7232, right back where it started.
Last night, at about 8:50pm, my Ichimoku told me to sell the AUD, after cutting up and down two times within the last 24 hours, so I short the AUD at 0.7207. By 2am in the morning, the AUD has fallen to 0.7157. I decided to take profit and go to sleep for a trading profit of $1.25Million or 50bps on a nominal size of $25oMM.
So, I have now improved my call option losses from $3MM to a lower $1.75MM. You really can’t win all the time………life!
The real issue now is where do we go from here? Do we look at shorting the GBP and the EUR? Well, let me share my thoughts with you in my next article on ‘Thoughts’.
I also have a thought provoking view that a conspiracy was started by China to encourage if not compel Janet Yellen from raising interest rates next month. Again, I will share my thoughts with you soon, so stay tune.
The Panthenon Investment Group 