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Category Archives: Trades

These is where we share with you the trades that we have executed. We also track our trades for overall profit/loss reconciliation.

O/S AUDUSD Call Option expiring 26 August 2016

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.

FOMC; GBPUSD

I also put in a trade for the GBPUSD with the following details: –

GBPUSD   –   Stop if Offered at 1.4080 with SL at 1.4110, Spot at 1.4121, Stop if Bid at 1.4150 with SL at 1.4130

When the GBPUSD launched to the sky, it triggered my 1.4150 trade.

I squared it at 1.4236 for a trading profit of 115bps.  Including the 44bps from the EURUSD, FOMC allowed me to make a total trading profit of 159bps.

Thank you.

Time to try and sleep now.

FOMC

Today’s FOMC was anticipated to be fairly volatile, with the market largely managing expectations.

Nonetheless, I expected an opportunity to carve out a trade.

At 1.55am, I put in my straddle with the following details: –

EURUSD   –   Stop if Offered at 1.1050 with SL 1.1070, Spot at 1.1086, Stop if Bid at 1.1130 with SL at 1.1110

As it turned out, rates was kept steady at 0.50%, and statement indicated a possible further two hikes for 2016.

Fed acknowledges global slowdown and uncertainty, more importantly, it recognizes global risks may impact the U.S.

The EURUSD burst upwards triggering my Stop if Bid trade at 1.1130, I waited till about 2:08am and squared the trade at 1.1074 for a trading profit of 44bps.

I am done, not going to wait for the press conference.  As usual, don’t like to chase a trade during the press conference, it’s too volatile.

 

ECB Rate Decision, Draghi front and centre!

Alot of noise was buzzing in the media, some FIs were expecting big moves and other lesser moves.

Mostly all in consensus that Draghi will give out something better this time around, then, again, some felt that it will be a non event like the last time.  Volatility also spiked up and shorts we scaled back compared to December 2015.

I decided to put in a wider straddle with the following details at 8:40pm: –

EURUSD  –  Stop if Offered; 1.0930 SL 1.0950, Spot; 1.0966, Stop if Bid; 1.1000, SL 1.0980

As it turned out, the refinancing rate was cut to 0% from 0.05% and the widely expected cut in deposit rates of 0.10% to negative 0.40% from -0.30% was offered and asset purchases we expanded from EUR60Bn to EUR80Bn.

EURUSD went south immediately to 1.0870 and held there for a while and then a few minutes ago, went slightly further down to 1.0835, I decided to square the position at 1.0860.  Spot is now 1.0867.  Locked in trading profits of 70bps!

Thank you Mario Draghi!

Will I be participating in the market later during the press conference?  Don’t know, maybe and maybe not, but certainly I will be in front of the screen and listening into the press conference.

D-Day; Friday, 26 February; Prelim GDP!

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!!!

 

28 January 2016; UK preliminary GDP

As the preliminary GDP for UK is a data that the market is focusing on, I decided to place my straddle at 5:27pm with the following details: –

GBPUSD: –

Sell, Stop if Offered 1.4220, SL 1.4240

Buy Stop if Bid 1.4270, SL 1.4250

Spot: 1.4251

As it turned out, the preliminary GDP came in on the spot at 0.5% in line with forecast.

GBP moved upwards positively but somewhat muted, it triggered my trade at 1.5270 and I squared the trade at 1.4292 for a trading profit of 22bps.

Ok lah……………

ECB Rate Decision and Draghi Press Conference

Media buzz coming up to the ECB rate decision was somewhat subdued, most of the buzz agreed that Draghi won’t do anything today, after what he did in December 2015.

I wasn’t comfortable with today’s event so I decided not to put on my straddle and instead followed the market.

After the announcement that there was no change in interest rates and repurchase, the EURUSD stayed steady at 1.08990.

Seems that the market was looking forward to the press conference to ascertain how dovish or bullish Draghi was going to come across.

During the first few minutes of the press conference when Draghi was reading from the statement, the EURUSD shot up to 1.0925 when he said that the monetary policy taken in December was correct, more importantly, that it was in response to the economic situation.  He kept talking about comparing the monetary analysis and the economic analysis in deriving the appropriate monetary policy.

Then, when he started to say that the ECB has unlimited policy actions available to act if necessary, the EURUSD began to slide dropping back to 1.0880.

When it started to move down to 1.0850, I decided to chase the market and short the EURUSD at 1.0850.  Draghi further commented in the Q&A, that the ECB will review to reconsider to further easing if necessary and that it has unlimited tools it can use to achieve it’s goal.  The EURUSD continued its slide down to 1.0788.  At about 1.0791, I decided to square off the position and made a tidy trading profit of 59bps.  All this happened within the first 20mins of the press conference.

Ok, now I can peacefully spend Friday with my wife, to shop for the coming Chinese New Year, more importantly, we are indulging in a spa session tomorrow………..bonding time.

If I don’t get to wish everyone, here’s wishing all a great weekend.

14 Jan @ BOE Rate Decision………….any surprises?!

The media buzz seems subdued going into the BOE rate decision at 8pm Asia time.

However, I decided to put a Long, Stop if Bid OTM just because……………

At 7:58pm; Spot 1.4388, Long Stop if Bid 1.4420, SL 1.4400

As it turned out, BOE decided not to rock the boat; rate same same at 0.50%, purchase facility at GBP375Mn…….both no change.

Policy statement, tilted slightly to the dovish side.

GBP hardly moved, so I decided to take out the trade.

It’s now 8:45pm and GBPUSD is trading at 1.4392………………..boring!

Looks like no more opportunities for the rest of the week.

I am going to spend Friday with my parents; lunch with my Dad and shopping and tea with my Mum.

Here’s wishing all a good weekend and let’s all get charged up for next week.

12 Jan @ UK Manufacturing and Industrial Production

Granted that the UK doesn’t have as strong a manufacturing base as compared to the services sector, but it still matters to the economy, BOE and the people.

I was in the midst of a conference when the data came out and my Iphone alarm went off.  I rushed back to my room and saw the terrible negative numbers on the manufacturing and industrial production.

I quickly decided to short the GBPUSD at 1.45 to chase the market.

It’s almost midnight here in Singapore and I just squared my position at 1.4366 for a whopping 134bps.

Thank you GBP!

It’s gotten me to start thinking is the freefall in the GBP starting from London session into NY session a precursor to the BOE on Thursday?

January 8th @ NFP!

The entire market was looking out for non farm payrolls as an indication that the Fed’s decision was an appropriate one.

Alot of buzz in the media with estimates from 160K to 285K and an extreme one at 100K.

At about 9:22pm, I put in my straddle trade with the following details: –

Short EURUSD   –   Spot 1.0863, Stop if Offered 1.0840 and SL 1.0860

Long GBPUSD   –   Spot 1.4588, Stop if Bid 1.4620 and SL 1.4600

As it turned out, NFP came in a whopping 292K against expectations of 203K.  More importantly, previous month’s 211K was not revised.

This means jobs are well supported in the U.S. even during the lean months of the winter.

My EURUSD was triggered and I withdrew the GBPUSD order.

I squared the EURUSD at 1.0803 for a trading profit of 37bps, was expecting a bigger spike since EUR has been rallying the past two trading days.  Oh well, ok for the first trade in 2016!

Here’s wishing one and all a great trading year in 2016.

I will be wrapping up 2015’s performance shortly and also sharing my thoughts for this year.