{quote} Do you pay attention to the "option expiry" numbers that news wires reported every day? How do we trade around these numbers? {image} Another question is regarding the floor trader pivots (S1, S2, S3, PP, R1, R2, R3) that I learned in stocks and futures trading, do you think they apply to forex market as well? I have indicators for Daily and Weekly pivot lines but I don't see any reliability in prices reacting to these lines.
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will you please post the newswires link? i search on the google but not getting anything substantial
GBP/USD volatility was totally depressed this morning. The pair was trading in 8 pips range for more than 2 hours. This is the best time for volatility trading. Long 1.6040-1.6100 strangle structured with Ladders. Expiry 12:00 London time. Net cost 18 pips. 1.6040 Ladder closed for 30 pips net profit. 1.6100 Ladder is still open.
{quote} Do you pay attention to the "option expiry" numbers that newswires reported every day? How do we trade around these numbers? {image}{image} Another question is regarding the floor trader pivots (S1, S2, S3, PP, R1, R2, R3) that I learned in stocks and futures trading, do you think they apply to forex market as well? I have indicators for Daily and Weekly pivot lines but I don't see any reliability in prices reacting to these lines. {quote} You didn't even try.
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Options expiries generate significant order flows mostly connected with the gamma scalping. If the liquidity is lower they have bigger influence on the spot attracting the price to the strike as a magnet. I trade usually the increase in volatility after the expiry. Pivots are good. I use them for confirmation of support and resistance levels.
Very nice STE off 50 EMA. I traded with spot and options. You can see the spot on the chart. Stop is at +1p now
I bought 20-minutes binary put with 1.60415 strike at 7.8 pips. The option expired in the money which means 92.2 pips profit.
{quote} For the 1.6040 ladder, what did price do or what must price do, move up or move down, and by how many pips, in order to collect that 30pips net profit?
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I bougth 1.61 ladder for 7.8 pips, and sold 1.6040 ladder at 90.2 pips. The total cost for the strangle was 7.8+9.8=17.6 pips. Then I closed the 1.6040 ladder at 52.1 for 38.1 pips profit. The other ladder was losing 7.8 pips, so the net prrofit is 30.3 pips. If the gbpusd turns up again for some reason I can make profit form the 1.61 ladder.
{quote} I'm afraid I don't understand any of these. I can't figure out how closing 1.6040 ladder at "52.1" (what is this?) can make 38.1pips profit, and where that "90.2pips" come from. I still have a lot to learn about such options. I'll go away for now until I can understand the language. Thanks for the quick response though.
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It seems complicated, but it is not. The Ladders gives you a payout if the price is above a certain price level. If you think that the market will go up, you buy a ladder. If you think that the market will go down, you sell the ladder.
This morning the volatility of gbpusd was severely depressed so I expecte a price move in any direction. With a long strangle you can trade wolatility breakout. The strangle itself is a simple options tructure. You buy options that profit from price move in both direction. For expample buy simultaneously plain vanill aput and call, or as in this case buy a ladder with a higher strike and sell a ladder with lower strike. If the market just moves in any direction you make profit.
I sold the 1.6040 for 90.2 pips and when the gbpsold off a bought it back for 52.1 pips. This is 38.1 pips profit. Tha ladder, as every other option, has a strike price and its own price. The loss from the other option was 7.8 pips (the price I paid), so the net profit is 30.3 pips.
{quote} So you actually meant $90.2 and $52.1? Because when you say in pips I went to the 1mins chart to find the pip movement which wasn't there. I'm still pretty confused though because I can't understand many other numbers I haven't asked. I will do some studying at the Nadex website and hopefully come back better educated than now.
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You can quote the price of the options in points. The $ value will differ depending on the size of the position. Ladders and other binaries are quoted from 0 to 100
Major pairs are going nowhere. Volatility is depressed by the upcoming BoE decision. Don't exepect any good set ups for now. Sit and wait strategy is best for this market conditions.
The US markets are closed for the Columbus day. This is the proper time for the "sit and wait" strategy. Trading is not gambling.
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It's now 3:38amET in US, right into London open. Market isn't moving much with EUR/USD making 8.8pips range in European session. Even the cross-pairs are not moving. We have both Japan and US bank holidays.
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No longer trading forex. Looking for full time job.
{quote} It's now 3:38amET in US, right into London open. Market isn't moving much with EUR/USD making 8.8pips range in European session. Even the cross-pairs are not moving. We have both Japan and US bank holidays. {image}
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I think that one of the differences between the profitable and losing traders is that the former know when to stay on the sidelines.
