Just took 15 pips gain off on one 1/4.
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Short EUR/JPY
- Thread starter riskfreetrading
- Start date
just took 30 pips off on another 1/8. Plan to reload if move up and fail in area of 160.70.
(Stops must have been hit on this quick move). I should have stayed longer on the descent!
(Stops must have been hit on this quick move). I should have stayed longer on the descent!
Quote from riskfreetrading:
Atticus: that is a lot of money in that time frame (for me at least). How do you handle an eventual loss if it goes against you (if it touches)? One must trade these things with almost no emotions to be able to do what you do. I guess that sort of money is behind a wall of fire, and it takes strength, courage, knowledge and deep pockets to step to the other side to collect it, and one deserves that sort of reward for doing so. If it goes through you will just make what a regular guy makes in 60 days work. That is a ratio of 1 to 60 in time. You are in your own league atticus. Write a book my friend, and let me know where I can buy it. Bravo!
The trade earns $2,500 if not touched. I paid $10,000 to return $12,500 including the debit. I usually try to approach a 1:1 risk when hedging deep otm American no touches. I can't achieve that ratio due to the touch probability of 20%. The hedge would become the primary trade if solving for a $5,000 spot-gain to cover half of my debit risk. In this case, 550k units would be required to cover half of the $10k debit at 1.5830.
IOW, it's a pure delta-bet.
Quote from atticus:
The trade earns $2,500 if not touched. I paid $10,000 to return $12,500 including the debit. I usually try to approach a 1:1 risk when hedging deep otm American no touches. I can't achieve that ratio due to the touch probability of 20%. The hedge would become the primary trade if solving for a $5,000 spot-gain to cover half of my debit risk. In this case, 550k units would be required to cover half of the $10k debit at 1.5830.
Thanks. So this part of a strategy. I will need to run the numbers in my head to get familiarized with it. Thanks for sharing it.
I looked at the charts. The level of 158.13 was a support before 10:30AM today and was broken at around that time. How much do you think would that NT option have been worth if entered into at around 10:30AM today. Probably I would have played it safe and bought the NT at 159.13, and play a hedge with stop entry if pair heads up to hedge. Could high prob NTs be a very good play in a trendy market (no news) assuming the touch price is opposite to the trend?
They're obviously very sensitive to price. They trade purely on gamma at this duration. Touch probability = payoff. You can assume a one sigma otm touch will express a payout of 66/100.
If you're very confident on price they are great trading vehicles. In your example they will often outperform a spot trade. I prefer the Euro-convention variant for directional trading. I will post an example later this evening with an image capture.
If you're very confident on price they are great trading vehicles. In your example they will often outperform a spot trade. I prefer the Euro-convention variant for directional trading. I will post an example later this evening with an image capture.
Quote from atticus:
They're obviously very sensitive to price. They trade purely on gamma at this duration. Touch probability = payoff. You can assume a one sigma otm touch will express a payout of 66/100.
If you're very confident on price they are great trading vehicles. In your example they will often outperform a spot trade. I prefer the Euro-convention variant for directional trading. I will post an example later this evening with an image capture.
I just re- read your comments before your last post. I think I got the essence of what you are saying. It reminds a trade I do on expiration dates, and it has been profitable to me without fail for many months now. I essentially sell some OTM calls (if down market) and puts if up (but generally calls, as market solds off quickly which makes puts more dangerous on short side).
The touch should be equal to double the probability of the pair being in the money at expiration (in your case in 24 hours). It is like twice the value of delta. The touch should then decline quickly, as the average time for it to hit should be small (maybe 25% of the 24 hours). So half the danger should be in the earlier parts of the trade. Am I getting close to the intuition behind this?
Buying the no-touch should then work most of the time, and if one is watching the market it should be really a good money making "machine". How do you make sure that OANDA does not overprice you on the No-touch?
9:30PM: sold an 1/8 eur/jpy @ 160.76.
9:33PM: added another 1/8 @ 160.81.
9:33PM: added another 1/8 @ 160.81.
sold another 1/4 at 160.92. Only 1/8 left to enter all.
Quote from atticus:
Sold 160.87 on weak swiss yen.
You are right. You told me about that way to look at the Yen, but I still have to include it in my routine. Do you know what the futures are doing? This EUR/JPY dance seems to reflect the up day today in equities (does asia usually follow what happens in the US?).
I just checked the futures: they are up a little. ES/NQ/YM= green 4/5.25/18