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Tag Archives: stop if offered

Market was anticipating the much awaited non farm payroll numbers and the unemployment numbers to confirm that the U.S., is on track in its economic growth recovery.

Wednesday’s ADP number was not encouraging at 213K against forecast of 224k, however, it was mitigated by the upward revision of December’s number from 241K to 253K.  This means that there is a possibility that the non farm payroll numbers could surprise on the upside of forecast.

Market was steady at about 9:10pm Singapore time.  My hunch told me that the non farm payroll numbers would be better, so I decided to bet on my hunch.

Orders: –

1.  GBPUSD – Stop if Offered at 1.5290 when spot was at 1.5323

2. EURUSD – Stop if Bid at 1.1500 when spot was at 1.1486

3. EURUSD – Bought a put option expiring Monday, February 9 with a premium of 36bps, spot at 1.1486 an breakeven at 1.1450

4. USDJPY – Stop if Bid at 117.60 when spot was at 117.28

Of course, all of us knew what happened, the non farm payroll numbers came out at 257K busting forecast of 236K and the highest in the past 6 years.

Market sold off the GBP, EUR and the JPY in a BIG way!

At about 11:15pm, I decided to square off all the trades.

Squared off the GBPUSD at 1.5248 for a trading profit of 42bps.

Squared off the USDJPY at 118.88 for a trading profit of 128bps.

EURUSD stop if bid order was not triggered.

Sold off the put option at 1.1326 for a trading profit of 124bps.

In absolute terms, we made 294bps in totality for all 3 trades.

WHAT A NIGHT!  THANK YOU UNITED STATES OF AMERICA!

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.