Ok another central bank’s turn to create volatility in the marketplace. BOE this week was squarely in the middle of the radar screen and of course, we should try and capture the volatility if it happens.
At about 7:54pm, I decided to place my straddle trade with the following details: –
GBPUSD – 1.5365 – 1.5385 – 1.5405 with spot at 1.5385 and stop losses at 1.5385
When decision came out to hold and inflation targets to be adjusted, the GBP collapsed to 1.5270, triggering my stop if offered at 1.5365.
I decided to hold the position till after the start of the press conference. Initially at the start of the press conference the GBP began climbing back up to 1.53295 and I thought maybe, I should square of the trade now and preserve my profits.
Then, with more comments from Carney talking about the fact that raising interest rates will be much further out in the horizon, the GBP went south again, and I decided to square off the trade at 1.5255.
Trading profits is 110bps……….RIGHT ON CARNEY!
Now to look forward to US unemployment claims in the next few minutes.
The Panthenon Investment Group 