. I smell $$$
I just took a look at all the posts I missed from last week and all I can say is that I'm really glad we have an idea cooker sustained here. I noticed some of the levels called by Ironman, MaryP etc got nailed for some solid reversals over the past few days for more than a few hundred pips. Awesome! Thanks all and good to be back....I should be back in the grinder again tonight.
Hi everyone,
Just a reminder that tomorrow is option expiration on many cash settled ccy options.
Last month on this day we saw AUD break into new highs, EUR popping out of a local high, JPY flooring it to below 103.50, and CHF breaking below 1.0450. This is one day of the month I use a lot of caution, as many of the rules dictated with support and resistance levels tend to be broken.
In keeping with the trend, a day like option ex day is a good day for buying or selling pullbacks and trading with the trend, especially during the London/US crossover. I would also only use this strategy if price is falling in between major support and resistance to begin with. It can be a very lucrative or destructive day depending on how you play your cards.
I took a look at some data for ccy options today, and scrutinizing some possiblilities for tomorrow the overall bias seems bearish-dollar. This isnt to say I have unseen barrier option data I'm missing out on, which is what I would really need to make a reliable forecast.
But just looking across american, euro style options and relating open interest I'm seeing JPY having downside pressure to 106.30 all the way down to 103.10, less pressure upside; the critical level upside being from 108.70 all the way up to 111.11.
In regards to barrier/binary options, just looking at a probable zone for price movement (based soley on my own judgement and chart analysis), I would speculate up to 110.50 upside (the most significant being appx. 108.70) and 105.50 downside (with 106.30 holding some significance).
For other pairs, I dont have too much info on right now but hopefully you can take a look at the JPY chart and see what I'm doing here and use your own judgement to follow along.
Again, major players are going to be looking at standard option data/critical levels as usual.
Options are not a widely discussed issue on this or many other forums, but they should be becuase they unquestionably move the market in some big ways. Just look for key levels to get broken on these days. Its the same thing as what we do on a day in and day out basis except in reverse.
Volatility is the key word for this day. The simple fact of the matter is that you do NOT know exactly what is going to happen. Support and resistance levels DO hold for pips on these days, but are less predictable. Pip ranges can be generally a little larger than usual, anywhere from 150 to 200+ on majors. Other times the day is less of an event; like anything else in nature it all varies.
Binary and barrier options are OTC products and you wont have exact data, but you can oftentimes guess what level price is headed for looking at american and euro style options as well as major support and resistance ranges once the daily trend is defined. 7am to 12pm EST I have found to be the most fluid times where price makes a run for it.
I haven't posted much info on the topic in the past, but I encourge you to Google the topic and read up on it as much as you can. Here is just a little info to get you started, but there is a ton more available out there.
http://www.google.com/search?hl=en&r...+binary+option
http://www.google.com/search?hl=en&r...barrier+option
http://www.google.com/search?hl=en&r...A*&q=fx+option
Some basic on the Phil exchange
http://www.phlx.com/market/WorldCurrencyOptions.asp?
Futures
http://www.cmegroup.com/trading/fx/index.html
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Good to have you back. What took you so long. Were you detained at Customs? LOL
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