I am just looking at the AUDUSD and it looks so ripe to do a Long Call Option.
The Daily chart and the 4H chart suggests technically that the AUD has turned from the bottom. In fact, it is about to cut up on the 200 day average of 0.7898 in the 4H chart.
Therefore, I am confident to buy a 3 month call option strike at 0.8000 with a premium of 97bps, a breakeven of 0.8097 and expiring on 29 May 2015.
Let’s see what happens.
Ever since RBZ lowered its rates last month, speculation was building in the marketplace about whether the RBA would or wouldn’t lower its interest rates as well?
A week coming up to Ferbruary 3rd saw numerous analysis put out by Bloomberg, Reuters and of course, the banks. Speculation that the RBA wouldn’t lower rates because it is concern about the high property prices and high cost of living.
Guess what?
At 11:30am, the RAB announced a 0.25% rate cut down to 2.25% from 2.50%. Surprise surprise!! Then again, I do not believe it was a surprise, however, none of us have a crystal ball, so he really can’t say for sure what the RBA was going to do.
However, my hunch was that it would cut rates because of mounting pressures. So I placed a stop if offered level at 0.7765 when the spot rate was 0.7805, about 10 minutes before the announcement. I also placed a stop if bid at 0.7835. In addition, since my inclination was rate cut I decided to gamble with buying a put option at 0.7765 for one day with a premium of 35bps, expiring on February 4th 10am NY time.
When the announcement came out, the AUDUSD fell off the side of the cliff falling over 100bps within 5 minutes.
My stop if offered order was activated at 0.7770 and I squared the spot trade at 0.7659 for a trading profit of 106 bps.
I also decided to buy back the option and locked in another 100bps trading profit.
Thank you RBA, I secured a 206bps trading profit within 10 minutes of the announcement.
What a great start to the month of February.
The markets was so volatile, so on Jan 14th at about 9pm, I decided to exit the option at 0.8290 for a trading profit of 105bps (breakeven was 0.8185).
What a great trade for the first trade of the year!
On 6 Jan, my ichimoku and stochastics looked ripe to go long on the AUDUSD and I executed a call option expiring Friday, 16 Jan; strike at 0.8118, premium at 57bps and breakeven at 0.8185.
The following few day, the AUDUSD actually went down to 0.8030 and I thought………..Oh dear my decision was wrong, however, I believe strongly that with the turmoil in Euroland and uncertain disinflation in the UK and hard to believe recovery in the US and crumbling oil prices………….surely everyone would go to the safe haven AUD currency.
Well, the AUDUSD certainly kept me nervous, yesterday it went to a high of 0.8240 before slipping down to 0.8160 on fears of poor employment numbers.
Guess what? Today, the employment numbers came in very strong at 37,400 jobs versus forecast of 5,300 jobs. It kept AUD bidded the whole day and then by London open it lost steam again falling back to 0.8165.
Then the SNB announced that they are removing the cap of 1.20 on the EURUSD…………….game over! AUDUSD shot up to 0.8294, GBPUSD shot up to 1.5266 and USDJPY shot up to 116.25…………..everyone was selling the EURUSD and it crashed down below 1.17 very quickly!
I am getting too old for this rollercoaster ride, then again, it’s fun.
This is my first trade for 2015 and many more to come, so stay tune…………..
By the way, I will be rounding up a performance report for 2014, though I am sure all of you have experienced it yourselves last year; the first half was sleepingly boring and then the second half of the year was ‘rock and roll’. Nonetheless, because of the difficulty in calling the trades and reading the market, our overall absolute performance for 2014 was much lower than in 2013. Anyway, will share more information on the numbers shortly.
More importantly, will be writing an article my thoughts for 2015!
There was so much talk leading up to the NFP today. My gut feel told me that it would be a market mover……….hmmmm……which way would be the real question?!
I felt that the NFP number would come out, as the summer months tend to post stronger numbers.
So I decided to place Stop if Offered trades about 20 bps OTM from the spot rates of GBPUSD, EURUSD and AUDUSD.
5 minutes after the announcement that NFP was 248K and unemployment rate at 5.9%…..Wow………market just sold off on the majors between 50bps to 80bps.
I immediately squared off my three trades and locked in a trading profit of 103bps.
I am now done for this week. Will update the earlier trades for the month of August and September next week.
Here’s wishing all a great weekend.
On September 8th at about 8:30pm Singapore time, I noticed a pattern emerging in my ichimoku and stochastics; the AUDUSD was starting to turn down on the MA on the 15M chart earlier at 5pm and then it also cut down on the MA for the 1H chart at about 8:30pm.
This tells me that a short term confirmed short trade in the AUDUSD was emerging. So I short the AUDUSD at 0.9330 and carried the trade till this morning and decided to square off the trade at about 11am at 0.9170 for a whopping trading profit of 160bps.
This is a classical good technical trade.
After looking through my technicals, including Ichimoku, MA, Bollinger bands, and stochastics, I decided that there were two potential trades: –
1) Long AUDUSD; stop if offered at 0.9256 (Spot 0.9236) and SL at 0.9230
2) Long Gold, stop if offered at 1,295.00 (spot 1,283) SL at 1,275
By the following morning Singapore time, nothing happened in the AUD, so I took out the order. Guess what, my NY session, the AUD was at 0.9280!
My Gold order was triggered and it was LIVE, I followed the market till the NY session when it reached $1,305 and I decided to take profit at $1,303 for a trading profit of $8.
Last night, I felt that there was a high probability that the RBNZ will hike rates this morning and if they did, the AUD would strengthened in unison.
So at about midnight, when the AUDUSD spot was at 0.8972, I placed a stop if offered spot order at 0.9000, good till 9am Singapore time the following day.
As it happened, RBNZ hiked rates from 2.50% to 2.75% at 4am Singapore time, my order was triggered early this morning at about 7:55am Singapore time.
I have been holding this spot position all day, wondering whether I should sell a AUD call to set a take profit level since I am already in the money.
I decided a few moments ago to square off the position at 0.9094 for a trading profit of 94 bps.
I saw and opportunity on February 12th to short the AUDUSD after I saw it fall past 0.90 and so I decided to short it at 0.8966 and shortly thereafter squared at 0.8930 for a trading profit of 36bps.
After my spot trade earlier in the day, I kicked myself for not keeping the spot position and instead write a call option as AUD continued to strengthen.
I suppose I was pre-occupied by my impending lunch with my father, so decided to just square off the spot trade.
Nonetheless, I saw the opportunity again later in the day, so I decided to buy a call option for one day at the strike of 0.8842 when spot was 0.8822 with a premium of 21bps and breakeven of 0.8863. At about 2am, the AUDUSD looked alittle peakish…………so I decided to sell the option at 0.8935 for a trading profit of 72bps.
I am born in the Year of the Tiger.
The Panthenon Investment Group 