Attachments: Daily GBP/JPY analysis

Daily GBP/JPY analysis

#3,701
Apr 23, 2007 4:25am Apr 23, 2007 4:25am

jest1081
Joined Sep 2006 | Status: Chasing Trends | 2,339 Posts

Quoting cesarnc

Disliked

I usually read this kind of comment, but I don't understand it... Anyone?

Ignored

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

dd33
| Joined Apr 2007 | Status: New Fight Begins Now | 963 Posts

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

Quoting jest1081

Disliked

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.

Ignored

Very well said bro....

#3,704
Apr 23, 2007 4:30am Apr 23, 2007 4:30am

dd33
| Joined Apr 2007 | Status: New Fight Begins Now | 963 Posts

Quoting jest1081

Disliked

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.

Ignored

So whats the 7.05 pct means??

#3,705
Apr 23, 2007 4:31am Apr 23, 2007 4:31am

jest1081
Joined Sep 2006 | Status: Chasing Trends | 2,339 Posts

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

cesarnc
Joined Nov 2006 | Status: Shoot all the clowns.. Shoot'em all | 14,520 Posts

Quoting jest1081

Disliked

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.

Ignored

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

cesarnc
Joined Nov 2006 | Status: Shoot all the clowns.. Shoot'em all | 14,520 Posts

Quoting jest1081

Disliked

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.

Ignored

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

jest1081
Joined Sep 2006 | Status: Chasing Trends | 2,339 Posts

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

cesarnc
Joined Nov 2006 | Status: Shoot all the clowns.. Shoot'em all | 14,520 Posts

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

cesarnc
Joined Nov 2006 | Status: Shoot all the clowns.. Shoot'em all | 14,520 Posts

Quoting jest1081

Disliked

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.

Ignored

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

jest1081
Joined Sep 2006 | Status: Chasing Trends | 2,339 Posts

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

jest1081
Joined Sep 2006 | Status: Chasing Trends | 2,339 Posts

Quoting cesarnc

Disliked

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"

Ignored

WHat the Heck! DejaVu!. I've seen this somewhere!

#3,713
Apr 23, 2007 5:15am Apr 23, 2007 5:15am

Islander
Joined Jan 2007 | Status: Trader | 11,838 Posts

Quoting jest1081

Disliked

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.

Ignored

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

cesarnc
Joined Nov 2006 | Status: Shoot all the clowns.. Shoot'em all | 14,520 Posts

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

Mother
| Joined Apr 2007 | Status: wheres my 3d goggles. | 248 Posts

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

Quoting Mother

Disliked

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.

Ignored

short now cry later mother!