I felt that the majors thrashing of the USD was overdone post FOMC and when the Ichimoku; Tenkan cut down on the Kinjun from the top at 1.6115, I decided to Buy a Put Option for 1 month at the money spot; premium of 125bps, breakeven at 1.5990.
Category Archives: Trades
I was watching the fx rates the 15 minutes prior to the 2am FOMC announcement, rates were holding steady in a very tight 5 bps range.
While it is near impossible to guesstimate what Bernanke is going to do, the general consensus in the marketplace is that he will make some ‘light’ tapering so as to follow through with what he has been saying the past two months.
I placed a total of 4 trades: –
AUDUSD – Buy Stop if Offered at 0.9388, spot was 0.9368
EURUSD – Buy Stop if Offered at 1.3395, spot was 1.3372
USDJPY – Sell Stop if Bid at 99.10, spot was 98.85
GBPUSD – Sell Stop if Bid at 1.5950, spot was 1.5971
Then at 2am, Bernanke shocked the financial markets with ZERO tapering! All the majors jumped against the USD, I was triggered on my AUDUSD and EURUSD.
I squared the AUDUSD at 0.9460 and the EURUSD at 1.3455 when I saw that the momentum was flattening out, then again, half an hour later, the majors resumed their torture on the USD. Trading profit on the AUD was 72bps and on the EUR it was 60bps.
Today, Asian afternoon and London morning, AUDUSD is at 0.9507 and EURUSD is at 1.3567. Oh well, one can’t capture the maximum move, I am happy with what I made in 15 minutes last night.
I was out playing golf this morning and got home early afternoon.
Today, I bought a GBPUSD Put Option expiring 27 September 2013, at the strike of 1.5915, breakeven of 1.5826, premium of 88bps.
We are 100bps higher because of Summer’s exit from the running for the Chairmanship of the Federal Reserve. Inspite of the recent better economic data, I believe the UK cannot afford to bear with the current exchange levels as it may prove to be rather painful and counterproductive to the economic growth for the country.
Let’s not forget that only on September 2nd, the GBP was trading at about 1.5550.
The 76% retracement level based on the 4H chart is 1.5692, this is about 134bps from the current spot rate and against the cost of the option, it is a 1.52X payout probability.
GBPUSD was holding at spot of 1.5760, I decided to do a spread trade; 20bps either side of the fence, stop if bid and stop if offered.
Data came out much better -32 versus forecast of -21, GBP popped up to 1.5820.
It triggered my Buy Stop if Offered at 1.5780 and I squared at 1.5815 for a trading profit of 35bps.
Now, GBPUSD spot is back down to 1.5773.
On September 4th, I executed a spot trade by going Short EURUSD at 1.3200 and squared at 1.3170 for a 30bps trading profit.
On the same day of September 3rd, I bought a call option on the AUDUSD for two days expiring September 5th. The spot was 0.8982, breakeven was 0.9032 and the premium was 50bps.
On September 4th about 11pm Singapore time or 11am NY time, I decided to sell the option as the spot was at 0.9180, I made a yum yum profit of 148bps or a 2.96X payout, not bad at all. My initial expectation was between 2X to 2.2X.
I executed a Buy on AUDUSD at 0.8985 as I felt that it was basing at that level based on Ichimoku and Stochastics.
Took profit at 0.9035 for a trading profit of 50bps.
I bought a 2 week call option on the USDJPY at the strike of 94.15 and breakeven of 95.86, that is, 1.71bps for the cost of the premium which is pretty expensive as volatility was high. However, my technical analysis plus the news out of Japan and Abenomics, I was confident that the yen would weaken.
I bought back the option on the last day at 0.9750 for a nice trading profit of 16.8%.
I saw another quick opportunity based on technical analysis and shorted the AUDUSD at 0.9275 and squared at 0.9260.
Ok, time to update the last two trades I did in June. On 28 June 2013, Long AUDUSD at 0.9233 and squared at 0.9260.
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