I really don’t know or didn’t know which way the flag was going to blow, simply because the media was creating alot of noise on both sides of the coin; one camp of FIs says Janet will raise interest rate, and the other camp of FIs says that Janet will hold.
As for me, I really don’t care, all I care about is the potential volatility coming into the rate decision. The more noise the higher the volatility. I am more interested in the verbiage in the statement and more importantly, the press conference.
I decided to put my straddle trade but with a wider goal post for safety reasons at about 1:44am: –
EURUSD – Stop if Bid; 1.1370, Spot; 1.1330, Stop if Offered 1.1290
GBPUSD – Stop if Bid; 1.5560, Spot; 1.5529, Stop if Offered 1.5480
AUDUSD – Stop if Bid; 0.7210, Spot; 0.7165, Stop if Offered 0.7125
USDJPY – Stop if Bid; 121.20, Spot; 120.85, Stop if Offered 120.35
All stop loss levels were at spot.
When the announcement of ‘HOLD’ came out, the market spiked triggering all my trades, but it also quickly settled back down and I was potentially looking at being stopped out. Thankfully, the majors slowly moved back up before reaching my stop loss levels.
At about 2:16am, I decided to square off all my trades as follows: –
EURUSD – Squared at 1.1400, minus 1.1370, trading profit was 30bps
GBPUSD – Squared at 1.5600, minus 1.5560, trading profit was 40bps
AUDUSD – Squared at 0.7210, minus 0.7210, zero trading profit
USDJPY – Squared at 120.35, minus 120.35, zero trading profit
We did US$10Bn on each trade and all orders were OCO, which meant that we didn’t have to double up our collateral for margin.
The press conference is ongoing now, but I think I will go to sleep now because I believe her responses to questions will be to be supportive, not necessarily accommodating, probably quite neutral.
I was really expecting alot more volatility but it really didn’t happen, oh well cie la vie. 70bps trading profit isn’t too bad since we did the trades on size.
The Panthenon Investment Group 