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Tag Archives: foreign exchange

Saw the low in the AUDUSD this morning and decided to add on to my earlier call option by doing another 1 month call option expiring Friday, December 14th with the following details:-

Strike at Spot: 0.7620

Premium: 72bps

Breakeven: 0.7692

Let’s see.

2017 has certainly been a crazy year with high volatility and uncertainties, I suppose that is what we traders live for, however, it does stress out the heart somewhat.

Just received the unaudited absolute performance of our trading year to date, and we have managed to lock in absolute returns of 160.79% till end October.

We had a total of 54 trades for the past 10 months or an aveage of 5.4 trades per month.

Our leverage was averaging about 7 times.

All in all, not a bad trading year.

As it turned out, this was a classic case of buy on the rumor and sell on the fact.

When BOE announced the hike, plus the votes and keeping asset purchase flat, the GBPUSD went on a meltdown.

I took profit at 1.3120 for a trading profit of 115bps.

Many thanks BOE and GBPUSD!

You know the classic story when they say buy on rumors and sell on fact.

Well, I felt that the GBPUSD kind of overshot, so I decided to gamble alittle by buying a small position by way of a put option for one day expiring on Friday, Nov 3rd with the following details: –

Strike at Spot: 1.3290

Premium: 55bps

Breakeven: 1.3235

Let’s see.

I feel that the AUDUSD is somewhat oversold, given the strong economy, strong exports, stable housing, low interest rates, good employment and great weather.

So I decided to buy a one month call option with the following details: –

Strike at Spot: 0.7665

Premium: 70bps

Breakeven: 0.7735

Currently, it is trading at 0.7700

I saw the GBPUSD peaked at 1.3271, but momentum seemed to wane, so I made a decision to sell the GBPUSD call options.

My breakeven for the two options worked out to 1.3149 and I sold off the options at 1.3268 for a trading profit of 119bps.

I really doubt it will go beyond 1.33.

In any case, it’s important not to ignore a handsome profit when it’s on the table.

Decided to take a punt on this data as it is crucial and will probably have an impact on the GBPUSD.

I decided to put on my straddle with the following deatils: –

Stop if Offered at 1.3100, Spot at 1.3122, Stop if Bid at 1.3145

As it turned out, preliminary GDP came in at 0.4% versus forecast of 0.3%, GBPUSD spiked up, triggering my Stop if Bid trade.

Decided to take profit on half the trade at 1.3200 for a trading profit of 55bps, it’s now trading at 1.3190.

Tonight is durable goods orders in the US, better not take any chances, lock in the profit first, I still have my GBPUSD call options.

 

Last Friday night, I decided to buy two GBPUSD call options because I felt that the GBP was probably hitting a low with the following details: –

GBPUSD Call option expiring Friday, October 27th; spot at 1.3030, premium at 100bps and breakeven at 1.3130.

GBPUSD Call option expiring Friday, November 10th; spot at 1.3030, premium at 138bps and breakeven at 1.3168.

Let’see what happens, spot is currently trading at 1.3134.  Let’s hope May doesn’t derail anything.

 

The USA had two good days; good ISM manufacturing PMIs, good ADP non farm payrolls, good ISM non manufacturing PMIs………..kept the USD bidded against all majors.

Although, my put options are only expiring tomorrow and we have the non farm payrolls which could be stronger or weaker than the ADP, I am not confident in taking the risk exposure going into the last day of my option.

So I decided to take what the market could give me now and sold off both the put options at 1.3180 for a trading profit of 80bps. Not bad lah…………1:1 payout ratio, was hoping for more…………….however, never stare Lady Luck in the face.

So, gladly I am out of all four put options without any BLOOD!  Sold of the first two at breakeven level and the last two for a profit.

Yesterday, I felt that the contruction PMI would be a volatile event data following all the talk about Brexit.  It would be interesting to see how the construction industry is taking to the potential exodus of expats and investors of out the UK and back to Europe.

Just before the announcement, as usual, I put in my straddle trade with the following details: –

Stop if Offered at 1.3260, Spot at 1.3280, Stop if Bid at 1.3300

As it turned out the construction pmi came out weakest in the past 13 months at 48.1 versus expectations of 51.1.

Initially, GBP didn’t collapse, however, it did later trigger my stop if offered leg and it continued to do a very very slow decline in to the opening session of NY.

I decided to square the spot position at 1.3230 for a trading profit of 40bps.