Tuesday, 15 November 2011

Last Night's / This Morning's Activity

We continue to like the USDJPY short mentioned a while ago, especially as the market has rallyed above 77 recently on dollar strength.
 
On light volumes, the market continued to range trade last night, presenting a limit entry at 77.1 (short).
 
We were filled at 22:46pm at 77.1
We were stopped at 02:24am at 77.4
 
This (guaranteed) stop-loss was put in place as protection against an unlikely BoJ intervention (much more likely at 76 levels) and was intended to be far enough away that the market wouldn't touch it under normal conditions but close enough that our exposure to political (read BoJ) risk was manageable.
 
Then:
 
   !!!!!!!
 
Reuters: "The dollar briefly spiked higher against the yen but later gave back most of its gains. Traders said the move was likely caused by a large-lot flow and stop-loss buying, and was probably not intervention."
Very, very unlucky.
 
Moving swiftly onto this morning, I have sold a call option on the FTSE strike 5520 with an upside of around 1%.
As a hedge I have sold more USDJPY at 76.93. This time stop is @ 77.90 or 2% portfolio risk. Target 76.2 over a number of weeks.
 
Stay tuned.
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