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Are dubious on USD/SGD’s bear trap? then delta hedge ATM calls

FX_IDC:USDSGD   US DOLLAR / SINGAPORE DOLLAR
122 2 4
We don't think any weakness is disrupting ongoing USD/SGD's uptrend.

Instead, the prevailing uptrend for USD/SGD seems to be corrected in short term (heading towards 23.6% Fibonacci retracement)

But our convictions states bullish trend is still intact in long term as it is likely to bounce back upon 23.6% retracement areas.

One can observe cautiously, how the prices bounced back as and when corrective retracements occurred which is healthy bullish trend .

In an attempt to evidence 6 year's high the pair is slipping below 3 weeks lows but long term trend still remains stronger.

Don't expect any asset class to give steep spikes or declines on a regular basis, if it happens then that's deemed as speculative moves one fine day tumbles massively.

If anyone has been skeptic on the downtrend of this pair, the At-The-Money delta call of USD/SGD value indicates the option's equivalent position in the underlying market.

ATM calls might be luring for many speculators or hedgers at this moment.

Let's suppose the adverse case of bull trend for an instance and you are highly risk averse, then long term USD/SGD ATM call options with +0.5 delta value can be delta hedged by selling 50,000 USD against SGD in the underlying FX market.

If our above predictions of 23.6% retracements come true then we can buy back and square             off the outright positions, thereby long term call options could be cushioned to served their long term hedging objectives.

Are dubious on USD/SGD’s bear trap? delta hedge ATM calls on puzzling swings
kopparam
a year ago
looks like Quasimodo pattern i am in this trade............thanks for sharing this.
Reply
kopparam
a year ago
i mean this is bear setup
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