Tuesday, July 19, 2011

FXA updated

You have to love the move today. The diagnol spread discussed yesterday is up 45 cents or 25% today alone. It looks promising to continue. We will watch for an opportunity to take of the short side or the whole position, depending on how it stalls at near term resistance.

Monday, July 18, 2011

Buy on FXA options

The options on the forex ETFs are pretty cheap right now. I was looking at the fact that the AUD/USD has fallen back to a key support. The cost for a 105 September call would only cost $2.40 today. That is $240 per contract, the nice thing about an option here is we can sell an August call above the last resistance area near 108 for 60 cents and lower our cost to $1.80 or $180 per contract. Though the spot market may drop and could stop out a 180 pip stop loss, this would not be a concern to this position. We could see price fall as far as it wanted to and as long as it rallies back, back above 108, we can and will gain $120