The GBP/USD has shown a lot of strength as the dollar has sold off today. If price clears the high 1.5520, price should continue to 1.5630 within 2-3 days. This is a 1 to 1 risk reward as we will be placing our stop below the lows of 1.5350.
A trade on FXB, scalping options on a currency ETF, we would buy a 155 call near 1.10 and we should be able to see it for 1.60 within the 2-3 day time frame.
Wednesday, December 29, 2010
Buy Puts on Boston Scientific
This is a quick scalp trade for a quick gain. If BSX closes below 7.61 on the hourly charts, I am planning on buying the 7.50 put for approximately 19 cents. Price should fall within 2 days to at least 7.10 if not lower. This move will increase the value of the put to 40 cents for a quick doubling of the trade. If price goes above 7.90 after triggering the trade, exit the trade at about 8 cents. This is about a 2 to 1 RR and I would give it 75% probability.
Monday, December 27, 2010
Head and Shoulders on CMG
Looking at CMG they have completed a nearly perfect, symmetrical head and shoulders pattern. The neck line, which has been violated today, gives more than $35 for the target. A Feb, at the money put could generate a $22 gain on a $13 investment. An out of the money short call may be a better way to trade this, selling the $230 Jan for $4.60 and letting it decay for the next 25 days.
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