Market has been discounting the news as they come, but no more. Nobody knows for sure how market is going to react if Greece actually goes bankruptcy. The thing with bad news is that when you think one piece of bad news has been discounted, another one follows. We don't have control over any of those events, all we can do is manage our trade. Anyway, I don't want to hold naked put over the weekends. ( Interesting that more bad news happen during weekend than weekdays ).
Actually both of you are making my point. You are saying, you remember vividly on how it happened. Do you know how often it was? And when it was? Do you remember the details? And this is the point... I checked it out and indeed your 1K pip movement did occur and it was not as dramatic as you say it was because at that time the exchange rate was 145. There was a drop over the weekend of 3.4%. Also at that time the VIX and VXN was out of this world. And had you sold your puts properly you would not have been anywhere near those values. The market very rarely does not telegraph risk! And had you done your homework you would not have lost your shirt. How do I know? Because I manage the risk at our hedge fund. And I have gone through that time many many times. Options are actually very interesting because a broker like IB will telegraph the risk to your position miles before the position is in danger. And if you watch how the options are trading and moving you can stay out of the markets way SO LONG as manage your risk! As the original trader who taught me says, "sure the market collapses, but not overnight!" That is why in the original post I questioned selling 1.46 puts since I am not even in 1.4 range...
Puts below 1.4 are so cheap that they are not worth selling. I would rather sell put spead then short those puts. The reason I closed out my naked puts was because I completely forgot about the news regardng Greece/Spain/Ireland when I initiated those trades.
Ok, that I can understand. If you play it close to the vest in terms of value, yeah I can understand how you would not want to play naked. That would be simply way to risky... Playing at the levels you do I would agree you need to play a different strategy. And in that case I can understand why you day trade them. Not a bad approach.
While no one think Fed will raise rate tomorrow, does anyone here expect that Fed might change their tone, even a little bit ?
Right now I am expecting inflation. I was until now not a hyper-inflation nut, and still am not. However, having said that. I am predicting that next year we are going to have an inflation problem. In the UK and the US CPI is hovering at 1.8% This is not good news since it is 0.2% below the target inflation rate with a crap economy. Thus next year there will be inflationary pressures and I am guessing the Fed will do squat causing a dollar exodus. Unless and this is what I am wondering. What will they say tomorrow. They know inflation is hitting and will they recognize it? I am betting no, but heck I might be surprised...
The fact that Ben is so reliably a Dollar crasher actually makes each subsequent FOMC more influential, not less. Any subtle tone change will have a profound influence on FX and Commodities market, probably more than the actual rate increase.
Just saw the WSj headline news regarding Euro, is this another 1992 moment in FX market ? if it is, 1.35 will be the near term bottom for Euro