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Straddle

DYNAMIC STRADDLE: USDJPY & GBPJPY - TP FROM BOJ & FOMC EVENT VOLThe best Idea to play BOJ and FOMC from a risk-averse perspective is to own both in a Long Straddle Strategy Dynamic Straddle: Long USDJPY & Short GBPJPY - TP from volatility & Event likely hoods TP levels = cannot be greedy else you may miss one trades exit point so <25 pips when it goes in your direction for each - total TP = 50pips as 2*25pips Reasoning - Traditional Straddle involves would be long and short the SAME cross.. - However i suggest we long USDJPY as UJ has proportionately MORE upside possibility: 1. FOMC is likely to be neutral-Hawkish, this will help UJ trade flat/ higher = Supports long - - *FOMC PARADOX* important to note that in this sensitive risk-off market if the FED is too hawkish/ hikes it can cause a UJ sell off, as higher rates means greater economic/ market uncertainty as liquidity and financing becomes tighter (despite rate hiking usually making USD trade higher through increased $ deposit demand for higher rates) 2. BOJ is likely to be dovish, this will help UJ to trade higher (especially in this risk averse market - easing helps calm mrkts) = supports long 3. USDJPY ISNT directly impacted by BREXIT fears as GBPJPY as USD and JPY can be considered safety assets, this helps USDJPY trade higher = supports long So we have 3/3 for long USDJPY. - Now to hedge this trade AND benefit from possible downside, we SHORT GBPJPY as GJ has proportionately MORE downside possibility. 1. FOMC neutral-hawkish, drives risk-off momentum (higher rates reduces market liquidity and undermines economic growth thus increasing uncertainty) which drives demand for Yen/JPY, increased demand for JPY supports short GBPJPY 2. BOJ being dovish/ easing potentially helps JPY sell off - however, GBPJPY will be the least sensitive of JPY seller of the JPY crosses, as GBPJPY is the perfect play for Brexit and risk-off, hence in the long run JPY selling wont last long in GBPJPY as once JPY is cheap, buyers will enter to continue hedging/ speculating on brexit with the favourite pair, poor potential/ long run JPY sell side = supports gbpjpy short 3. GBPJPY is directly impacted by Brexit uncertainty in two ways. 1) as investors wish to sell GBP as the uncertainty is only negative for GBP (especially when polls are at 55%). 2) as Investors wish to buy JPY for their "safe haven" asset play. UJ only has the JPY buying to push it lower, which is limited/ offset further as USD buying can also be considered a "safe haven asset) = Supports short GBPJPY We have 3/3 for short GBPJPY Evaluation. - We have 3 points supporting both LONG UJ and SHORT GJ - AND by playing this trade we are able to gain from ALL eventualities, we dont have to guess the BOJ or FOMC outcomes since we have a LONG and a SHORT we have covered ALL eventualities. - Also from a vol perspective, GBPJPY risk reversals continue to become negative by a significant amount 1wks lost 0.6 to -2.1 (from -1.5), so investors continue to demand GBPJPY downside puts for speculation/ hedging - supporting the short. - USDJPY ATM volatility, sold off significantly with 1wks losing 3.55 to 12.45 - lower vol in UJ supports buying. *Any questions on why i think FOMC will be neutral-Hawkish or why BOJ will be dovish-easing please ask in the comments*
by QuantumLogicTrading
Cash in: No hold weekend for meNo reason to hold anything over the weekend unless you have to. Something smelly about the markets. I can feel the SPY wanting to sell. MPC rallied up testing 37.00 fib level. It tested that level and it did not breach. The chart indicates overall bullish. It has/is building a nice $35 floor for itself. THE MODEL HAS NOT BEEN RE-DRAWN AND MPC IS TRADING PER THOSE FIB LEVELS SINCE MY FIRST MPC FIB POST. You can put a strangle on at 37.00 and 35.00 if you can afford to be that close to the money, but my money is better off elsewhere. Now, if it rallies to $37.80, that'd make a nice cup formation. MPC has history of cup-and-handle breakout (see older chart). Now, if you have followed my posts, you will have noticed me repeatedly saying that MPC has a history of bucking the SPY. It has. With that said, it's outside my own personal risk appetite. Have a good weekend!
NYSE:MPC
by nodiggity
1
SOLD SLV MAY 27TH 16.5 SHORT STRADDLESold a May 27th 16.5 short straddle at NY open, given the fact that it was one of the few underlyings with a 70+ implied volatility rank (it was, at any rate, this morning; it has come off that a bit). The metrics: Probability of Profit: 53% Max Profit: $127/contract Buying Power Effect/Max Loss: ~$287/contract; Undefined Risk Break Evens: 15.23/17.77 Notes: With short strangles, I generally look to take profit at 25% max. In this particular case, this won't yield much if you only go with a one lot, so you may want to increase your lot size to be able to get at least $50 out of the trade ... .
AMEX:SLV
by NaughtyPines
50% PROFIT ON STRADDLE SO FAR50% PROFIT SO FAR ON SPY STRADDLE SPY APR 8 203.50 P @ $ 30 PUT HIGH OF THE DAY &.88 CALL PORTION OPENED AT $.09 for a total high price of the day $.97 so far for the straddle FOR A 50% PROFIT SO FAR APRIL 4 STRADDLE SPY APR 8 208 C @ $ 33 SPY APR 8 203.50 P @ $ 30 RISK DISCLAIMER Options involve risks and are not suitable for everyone. Option trading can be speculative in nature and carry substantial risk of loss. Only invest with risk capital. topandbottomtradesignals.net
AMEX:SPY
by GIFTEC
SPY WEEKLY OPTION STRADDLE FOR NO REASONAPR 4 SPY WEEKLY OPTION STRADDLE Here's a straddle for no particular reason other than we are between support and resistance and one might not hold 206 and 207 APRIL 4 SPY STRADDLE SPY APR 8 208 C @ $.33 SPY APR 8 203.50 P @ $.30 Equal amounts invested in each TOTAL COST .$.63 RISK DISCLAIMER Options involve risks and are not suitable for everyone. Option trading can be speculative in nature and carry substantial risk of loss. Only invest with risk capital. topandbottomtradesignals.net
AMEX:SPY
by GIFTEC
How to Profit Regularly with SPY Weeklys Playing the SwingsThere are numerous opportunities every month to profit from the swings in the minute charts if you can find those trading entry and exit points. If you know if you are looking at a top or bottom of a swing you greatly increase the odds you are trading in the right direction and knowing when you at the other end of your trade can help you maximize you profit. Whatever you are trading knowing when the conditions technically ripe for a change can be monumental to your success. the attached charts show how the charts show entry and exit points and what kind of success you can have. I have numerous example of signals and trades on website for you to checkout. topandbottomtradesignals.net
AMEX:SPY
by GIFTEC