now i wish i would’ve gone short at 1.1115, against us by 9.5 pips and droped like a rock by 20 pips.damnnnnnnn
[ul]
[li][B]Option NY cut EURUSD 1.1000 (EUR 850m)[/B][/li][li][B] 1.1100 (1.5bl) [/B][/li][li][B]1.1200 (2.8bln)[/B][/li][/ul]
Good news, I see heavy offers at 1.12290 area if price close above this price by 1200 ET i will look to go short with stops just above 1.12448
seems like trade didn’t work out i didn’t get filled at the time mentioned,if i can get close to it i will take a small risk nothing more than 5 pip stop if you want to take this trade.
offers 1.12711 eurusd
Very nice, move to breakeven now
Offers EUR/USD 1.1315 area
For got to say this offer at 1.1315 area is only valid for one hour from now
I’m short EURUSD 1.13220
I’m taking half off and move to BE
out at Be and now another shot trade at 1.13250 with stops just around 1.13310
[ul]
[li]Options NY cut[/li][li]EURUSD 1.1100 (EUR 760m)[/li][li]1.1200 (224m)[/li][li]1.1255 (444m)[/li][li][B]1.1280-1.1300 (797m)[/B][/li][li]GBPUSD 1.5220 (GBP 360m)[/li][li]1.5355 (390m)[/li][/ul]
Good morning Bank,
Would you please explain how this should be interpreted ?? I ve looked everywhere and all i got was that we have too little influence to take those into consideration…please help
Thanks
Hi Ciprian
Well basically depends on the news event of the day these prices will act as magnet most times.
I trade these sometimes after the news events. As you know banks they sell at the offer which you buy it from them, and buy at the bids which you sell it to them.
So we have market maker and there is no such a thing as non deal desk, if you can understand this then you see that the goal of market maker at the bids is for the price to go up and at the offer is the price to go down,It’s funny that when you click the offers on your platform to buy they actually want the prie to go down and with help of indicators they make you believe that in short term price will go up.and as you see almost 98% of retail trades lose money.
trading with technical analysis is like you driving your car with help of rear view mirror.so tell me this can you drive your car with rear view mirrors?
the only way to drive your car is to be able to look outside in the street,look for signs,look ahead of you and looking back.
so Options NY cut most times act like a magnet especially after news.i wont take them before news.
another thing i do is sometimes when news comes out i actually do the opposite of the Bids and ask.
so after news if we break bids by 0.5 pip most likely price will run down by 5 to 10 pips easy.
Just an example of Friday NFP came out draw the bids and offers on a chart as your support and resistance, and also take a look at options NY cut numbers. you see sometimes when we have a big option ( more than Yard or 2 yards) price will head towards it.as if the knew what the NFP number might come out. Unfortunately there is no strategy that i can teach you to trade these numbers without access to depth of information…
I’m trying to find a way to give people access to the depth for free without jeopardizing my relationship with my dealers.
Maybe one day soon i speak with babypips owners and we might be able to give you guys a live feed from their website free.
I’m not like anyone else looking to make money from this.
thats all i can tell you now to trade Ny cut but for time being treat them as you support and resistance.
Offers 1.1275 to 1.1285 if price hold these levels by 1200 i will go short with 8 pip stop.
remember price should hold between these numbers
Nice move down, i couldn’t catch he trade , I placed an order didn’t get filled, but if anyone took it you should be in the money.
I found this for you maybe it helps.i suck at explaining.
What happens at the cut-off ?
OTC options in the inter-bank market are of the European and deliverable flavour which means that they can be exercised on the day of the expiry only and if exercised the counterparties execute a spot transaction at the strike. Furthermore,
despite the fact that it is called NY cut, the actual process of exercising the
options are usually done by London trading centers for most of the major banks
as London still remains the main fx trading center due to its access for both
early morning US trading hours as well as late Asian times. As the cut-off time
approaches at 14:57pm in London, the banks with the long option position call
their counterpart on Reuters dealing terminals to say whether they want to
exercise their long options or not.
Lets take an example. Suppose LongBank is long an EURUSD
call at strike 1.2300 for 100mio with counterparty ShortBank who has the
reverse position. At 14:59:55 the
spot market is trading 1.2307. If the trader is delta-hedged conservatively
that means that before the option expires he is long 50mio EURUSD above 1.2300
and short 50mio below. So if just before expiry he exercises the call by buying
100mio at 1.2300 from ShortBank, he can immediately close down his position by
selling 50mio at 1.2307 in the spot market. At the same time ShortBank is
likely has the opposite position if hedged conservatively and everything is
reversed.
Sudden moves
So why can option expiries cause the occasional sudden move
in the market ? In the above example the main assumption was that the both the
option holder and the counterpart have hedged their position conservatively.
This completely changes if one counterparty has options for speculative
reasons. A customer, like a hedge-fund, does not necessarily want to hedge
their exposure in the spot market, but rather they are looking to put an
exposure on by using options. The said customer could for example trade with 3
banks in 200mio each putting on the same position. At the time of expiry the
market makers would need to cover a spot position of 100mio each in a short
amount of time in order to make them delta-neutral causing a classical
break-out in shorter time-frames.
Also quite often the ISM economic numbers often coincides
with NY cut causing further volatility and uncertainty.
At-the-money volatility as an indicator
Other than adjusting to the swings of the market, currency specificvolatility data should replace VIX for most macro oriented traders. The
negative correlation between stocks and VIX has been well known and similarly
for most currency pairs there is a risk-on / risk-off parallel that can be
drawn, especially for most emerging economies. While at-the-money volatility numbers for the short term indicate the implied speed of the spot movements, which is usually faster and more sudden in risk-off environments, risk-reversals (or skew) signify the strength of the correlation between the speed and the direction of the market.
So if
one day you see a long-term breakout in both currency volatility and the spot, you may
have to adjust your intra-day trading to take into account of that the long-term
trend is now strongly dominated. AUD is a typical risk-currency that trades
such way. One common trading setup is when after a substantial down-move and
spike in volatility for AUDUSD over a period of weeks/months, further drops do
not cause higher volatility and sometimes implied volatility may even decline,
signalling that the move is losing steam and a turn-around could be around the
corner.
Finally volatility should also feed into most system or rule trading where take-profits and stop-losses are defined as fixed target. When volatility increases to double, it makes sense to adjust these limit orders accordingly, strengthening the system by adapting it to current and implied future market conditions. This will help you even when going into a quiet holiday season as well over Christmas as market volatility drops markedly or when volatility suddenly jumps like at the flash-crash as implied volatilities will tell you exactly by how much you are expected to modify your orders.
Conclusion
To sum up, for the savy trader, option market data could
provide more than just an additional dimension for trading. However the order
of complexity is much higher as one needs to take account day-light-savings
times, economic releases, holidays and speculative flow. While this
does not make a difference every single day, but there are a handful of
times in a year, where the additional knowledge can create outlier profits
making their month or even their year. Finally, if you trade a system or rule-set with fixed limit order distances then you would be well suited to adapt it by considering the current implied market volatility.
Thank you Bank, time to start learning.
Regards,
Ciprian
offers EUR/USD 1.1285 and 1.1304 area
Another nice trade if you look at offers 1.1304 only went against us by 2 pips and gave us a good 10 pips,i didnt took this trade anyways,just saying