You will recall that I was a strong believer in the AUD and the Australian so much so that I bought two large call options.
The first with the following details: –
Spot: 0.7015
Premium: 288bps
Breakeven: 0.7303
Expiring 26 August 2016
I decided not to stare good fortune in the face and sold the option at 0.7603 for a 300bps trading profit.
Though the absolute amount of the trading profit is nice at US$5.4Million, from a risk reward ratio of near 1:1 (as the option cost me US$5Million), it wasn’t exactly a good trade.
However, I was not about to continue waiting for the Australia economy, I have somewhat lost faith in its rebalancing and rejuvenation away from mining.
The remaining AUDUSD call option expiring 9 July 2016 has a breakeven of 0.7420, I will take a chance and keep this option as I still have time on my side and who knows, maybe, some of the private banks are correct when they are forecasting AUDUSD at 0.7900 within the next 3 months.
The Panthenon Investment Group 