USDCAD Options Position Now In The Money
I'd been watching USDCAD accelerate away from the Daily uptrend last week but didn't see a good enough opportunity to get short. On Tuesday morning we'd failed again at 1.38500 during Asia and was selling off below VWAP.
This was a decent intra-day signal and I opened an options position with a 1.3800 strike, expiring Friday Nov 3rd. Unfortunately price bottomed soon after and caught a strong bid for the rest of the day. This put the position underwater having paid a premium for such a close strike at the time of entry!
Consolidating at the high through Wednesday, we topped at 1.39000 after the Fed decision, which didn't cause an immediate sell off on the news but once it was digested, price started to slide and struggled to regain itself during Asia.
Today saw a brief spike back into Tuesdays failure point at 1.38500 (an unbelievable intra-day short if you took it!) before a sustained drop all the way to 1.3770 where I was able to bank 20% profit on the position with the remainder being held until tomorrow.
Anything could happen between now and expiration, but after holding the position most of the week, taking full profit into 1.3770 isn't a good enough R:R. I will however be aggressive with profit taking tomorrow as the closer we get to Exp the more time decay on the option, so you certainly don't want to hold out for a few extra pips. If you have profit at that point, take it.
This was a decent intra-day signal and I opened an options position with a 1.3800 strike, expiring Friday Nov 3rd. Unfortunately price bottomed soon after and caught a strong bid for the rest of the day. This put the position underwater having paid a premium for such a close strike at the time of entry!
Consolidating at the high through Wednesday, we topped at 1.39000 after the Fed decision, which didn't cause an immediate sell off on the news but once it was digested, price started to slide and struggled to regain itself during Asia.
Today saw a brief spike back into Tuesdays failure point at 1.38500 (an unbelievable intra-day short if you took it!) before a sustained drop all the way to 1.3770 where I was able to bank 20% profit on the position with the remainder being held until tomorrow.
Anything could happen between now and expiration, but after holding the position most of the week, taking full profit into 1.3770 isn't a good enough R:R. I will however be aggressive with profit taking tomorrow as the closer we get to Exp the more time decay on the option, so you certainly don't want to hold out for a few extra pips. If you have profit at that point, take it.