The market was so quiet all week except for Wednesday’s drop in the afternoon or London opening, no significant data or was it because of the fall in the Shanghai equity market?
Anyway, I had a hunch market needed to go back to rational volatility where market responds accordingly to strong or weak data, minus all the noise from politicians and central bankers.
I figured US Prelim GDP was going to be a market mover. So at 9:25pm, I did the following trades: –
EURUSD – Call Option expiring 29 February, spot 1.1017, premium 37bps, BE 1.0975.
GBPUSD – Stop If Offered; 1.3955, SL 1.3975 with Spot at 1.3984 and Stop if Bid; 1.4015, SL 1.3990
When the Prelim GDP data came out much stronger at 1% q/q versus expectation of 0.4%, the market went wild.
I squared off the GBPUSD at 1.3909 at about 11pm for a trading profit of 66bps.
I squared off the EURUSD this morning Aussie session at 1.0920 for a trading profit of 55bps.
121bps for the one and only trade in February, not bad!
February was truly a frustrating month where irrational volatility dominated the financial markets. It all started in early February during Chinese New Year celebrations in Asia; oil prices fell again, Shanghai market fell again, negative interest rate announced by BOJ. Then, later in the month was the UK and fraternizing with Brexit. Strong US data and USD weakens, weak Euro data and EUR strengthens…………absolutely crazy!
All in all, I put in 5 other trades during the month of February but because the market was irrationally crazy, I pulled out the orders each time I went in.
So I am so happy that I finally have a reprieve on Friday, February 26th to make a killing!!!
The Panthenon Investment Group 