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Daily GBP/JPY analysis

  • #3,701
  • Apr 23, 2007 4:25am Apr 23, 2007 4:25am
Quoting cesarnc
I usually read this kind of comment, but I don't understand it... Anyone?
means an option will expire on may 10. If GBPUSD closes at price 2.0400 (or above) on that day, those in the money will get the returns. If not the option will expire worthless.
  • #3,702
  • Apr 23, 2007 4:25am Apr 23, 2007 4:25am
May be they trade it like futures?? Dunno also.. anyone?
  • #3,703
  • Apr 23, 2007 4:26am Apr 23, 2007 4:26am
  •  4x_Trader
  • Joined Dec 2006 | Status: Is the market a FRIENDLY place to U | 639 Posts | Online Now
Quoting jest1081
means an option will expire on may 10. If GBPUSD closes at price 2.0400 (or above) on that day, those in the money will get the returns. If not the option will expire worthless.
Very well said bro....
  • #3,704
  • Apr 23, 2007 4:30am Apr 23, 2007 4:30am
Quoting jest1081
means an option will expire on may 10. If GBPUSD closes at price 2.0400 (or above) on that day, those in the money will get the returns. If not the option will expire worthless.
So whats the 7.05 pct means??
  • #3,705
  • Apr 23, 2007 4:31am Apr 23, 2007 4:31am
Anyway i have no idea why people risk on out of money options in the first place. Its purely crazy and speculative in nature with no real analysis or fundamental placed in view. Pure speculation wand that 7% vol contributing to trading the options will be in for some wild ride....I had it once...wild and bumpy ended up in a smashing ending. Simply said, i crashed and burned.
  • #3,706
  • Apr 23, 2007 4:31am Apr 23, 2007 4:31am
Quoting jest1081
also 5.5 is already expected...so i believe that would have been priced in already. You might see a euro repeat...surprise would be BOE raising it by 0.5 compared to the expected 0.25. Comments pls. Cesarnc, your expert fundamental views are much appreciated as well.
Largely expected is 0.25% up to 5.5%. Market was already expecting this hike for May, since the last hike to 5.25%.

What has now changed is that 5.5% was looked as toppish for 2007, now the market started to look to 5.75% as toppish due to last 2 very strong CPIs. Have in mind that UK's target for CPI is 2.0%. Tolerance level is 3.0%. Last CPI was already 3.1% coming from a strong uptrend.

Key will be next hike (.25%, imo) + 2 or 3 CPIs. If they come strong, showing that the hike was not enough, market will start trading another .25 for the year.

Cable is trading silly during this European start, but lack of sellers for continuation downwards was good news so far. Note the poor data slate until Wednesday favors stop hunting, silly moves, choppy hours and sudden turnarounds...

Weaker than expected Retail Sales on Friday may be in play yet, not favoring immediate term recovery to mid-2.0. Patience today is key.

Also some carry trades unwinding (don't know why) took place during Tokyo. They are likely to recover later on, favoring cable up.
  • #3,707
  • Apr 23, 2007 4:35am Apr 23, 2007 4:35am
Quoting jest1081
means an option will expire on may 10. If GBPUSD closes at price 2.0400 (or above) on that day, those in the money will get the returns. If not the option will expire worthless.
Thanks, jest.... Damn bold trade this one. 400 pips up from here, 2 weeks to go... What do they know that I don't?
  • #3,708
  • Apr 23, 2007 4:44am Apr 23, 2007 4:44am
Like i said, if u get it in the money...go to the shrine and send your thank to god for letting you win, do lots of charity, else just get some pillows so that you cushion your crash and some water to wash off those burns.
  • #3,709
  • Apr 23, 2007 5:01am Apr 23, 2007 5:01am
Apparently, this is what caused the Yen up during Asia.

London saw below-average activity in continued selling of the JPY crosses, following Asia’s lead on the back of a couple of news clips. The first, as discussed in the Asian update, was related to talks of Japan setting up a state investment fund. The second piece of news was the debt rating upgrade of Japan. Standard & Poor’s announced a one level rise to AA, bolstering the Japanese currency. (S&P is a financial services company that rates stocks and corporate and municipal bonds, among other entities, according to risk profiles.)
  • #3,710
  • Apr 23, 2007 5:06am Apr 23, 2007 5:06am
Quoting jest1081
Like i said, if u get it in the money...go to the shrine and send your thank to god for letting you win, do lots of charity, else just get some pillows so that you cushion your crash and some water to wash off those burns.
I don't build scenarios for more than a couple of days, so 0400 never appeared here... However, if there is this option at 0400, we may be seing 0200-0300 quite soon, no? AS WE don't need 0400 desperately, 0200-0300 will be nice enough... Let's just "Live and Let Die"
  • #3,711
  • Apr 23, 2007 5:13am Apr 23, 2007 5:13am
Well that could be a probable scenario...on the extremes though. Im not sure how options are driven in FX but mostly these out of money options are usually played with 'money willing to lose'. And there are plenty of em laying around all over the market, just waiting to be picked up. Options writers are usually the winners. In the equity markets its uslaly the big boys who control the options market as they have the ability to corner the prices to submission esp those less liquid stock options but hedging the currency with options is probably a very different ball game.
  • #3,712
  • Apr 23, 2007 5:15am Apr 23, 2007 5:15am
Quoting cesarnc
I don't build scenarios for more than a couple of days, so 0400 never appeared here... However, if there is this option at 0400, we may be seing 0200-0300 quite soon, no? AS WE don't need 0400 desperately, 0200-0300 will be nice enough... Let's just "Live and Let Die"
WHat the Heck! DejaVu!. I've seen this somewhere!
  • #3,713
  • Apr 23, 2007 5:15am Apr 23, 2007 5:15am
Quoting jest1081
means an option will expire on may 10. If GBPUSD closes at price 2.0400 (or above) on that day, those in the money will get the returns. If not the option will expire worthless.
We could expect that the option would be written (sold) by a bank and that they would therefore try hard to make certain that it expires worthless....i.e. keep cable under the 400 level. IMO its effect will be related to its size - how many 0000000s are involved.
Trading Levels with WRBs
  • #3,714
  • Apr 23, 2007 6:14am Apr 23, 2007 6:14am
This damn Yen is so crazy ... Too good I got the dip 118.25s and GJ 236,70. I was afraid of those figures, but decided to give it a shot
  • #3,715
  • Apr 23, 2007 6:19am Apr 23, 2007 6:19am
indeed its gonna push for a while. keeping trickers ready day if it wants to turn back to continue way down. 237.85/95 curious point. might give good indication for turning or continueing.
  • #3,716
  • Apr 23, 2007 6:38am Apr 23, 2007 6:38am
  •  4x_Trader
  • Joined Dec 2006 | Status: Is the market a FRIENDLY place to U | 639 Posts | Online Now
Quoting Mother
indeed its gonna push for a while. keeping trickers ready day if it wants to turn back to continue way down. 237.85/95 curious point. might give good indication for turning or continueing.
short now cry later mother!
  • #3,717
  • Apr 23, 2007 6:56am Apr 23, 2007 6:56am
Buying the dips....
All hard work brings a profit, but mere talk leads only to poverty.
  • #3,718
  • Apr 23, 2007 7:30am Apr 23, 2007 7:30am
Quoting Sami7
Buying the dips....
What does it benefit a man to gain the 10 pips against the trend and lose the whole uptrend in the process?

  • #3,719
  • Apr 23, 2007 7:36am Apr 23, 2007 7:36am
Quoting cesarnc
What does it benefit a man to gain the 10 pips against the trend and lose the whole uptrend in the process?

LOL. I might have to use that one!
All hard work brings a profit, but mere talk leads only to poverty.
  • #3,720
  • Apr 23, 2007 7:54am Apr 23, 2007 7:54am
Quoting 4x_Trader
short now cry later mother!
dont worry! i shall when the market says so might be soon might be tomorrow .. *Observing Mode Activated*
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