RE: Follow-up RE: [OpenFX] AUDUSD: Short?

Hi Gerald,

Without getting into a really long-winded discussion (which can happen when we talk bout options), here's the short-winded version:

It's a conservative play (in the money options are) with plenty of time premium (which is what you're paying for there). September is based on a technical view, and, there's no guarantee this pair won't make another push higher based on short-term charts. Note: This was also selected before the weekend.

Of course, there are many ways to trade options; as I said above, this one, in my opinion, is conservative.

Hope this helps.

Cheers!

Clay

-------- Original Message --------
Subject: Re: Follow-up RE: [OpenFX] AUDUSD: Short?
From: Gerald Pilj <gerald_pilj@yahoo.com>
Date: Tue, March 08, 2011 12:01 pm
To: OpenFX@yahoogroups.com

Clay

Why did you choose the 102.50 put? That is in the money by 1.50

my broker (Thinkorswim) offers the XDA September puts at
current price 101.03
101.00 for 4.95 expiration break even 96.06
101.50 for 5.25 expiration break even 96.27
102.00 for 5.55 expiration break even 96.46
102.50 for 5.88 expiration break even 96.66

or are you only planning to hold it for half its expiration and sell in Jun
101.00 for 4.95 expiration break even 98.10
101.50 for 5.25 expiration break even 98.17
102.00 for 5.55 expiration break even 98.23
102.50 for 5.88 expiration break even 98.44

Also, why September?

From: "clay@claymarafiote.com" <clay@claymarafiote.com>
To: OpenFX@yahoogroups.com
Sent: Tue, March 8, 2011 10:23:36 AM
Subject: Follow-up RE: [OpenFX] AUDUSD: Short?

Almost forgot...

Anyone who's interested in the long-term aussie option short might consider this:

Buy Australian dollar puts up to $5.90/option, making the cost $590 per contract (or lower, if you can get a better price). This is traded on the Philadelphia Exchange (PHLX) and the trading symbol is (@XDA 110917P00102500). Here's what you need to tell your broker: "I want to "buy to open the Sept. '11 102.50 puts--or put options--(@XDA 110917P00102500) @ $5.90 or lower."

If you find this information useful/helpful, please let me know. I can always be more specific, or less, or not provide any of it if nobody really cares ;-) That said, going forward, once the new site it up, this is some of the information I plan on making available--with the technical analysis reasoning, too (see yesterday's post) . Of course, we'll have active trade calls, with specific entries, targets, stops and exits, along with the other items I've mentioned (you saw these in the survey). Variety is the spice of life!

Again, keep me posted with your feedback.

Cheers,

Clay

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-------- Original Message --------
Subject: RE: [OpenFX] AUDUSD: Short?
From: <clay@claymarafiote.com>
Date: Tue, March 08, 2011 10:35 am
To: OpenFX@yahoogroups.com

Hi Jack,

Thanks for your note. I'll be putting options information at the new site. Quickly, currency options are traded through a regular stock account (check with your broker to make sure they offer this) on the Philadelphia Stock Exchange. Of course, FX traders don't have to use options and can just use their normal spot FX account, in thi this case, taking a short position. The advantage of options "is risk" is limited to the cost of t he option; however, the return is less, too.

Either way, options or spot FX, per my comments yesterday and the attached chart, I hope everyone was able to take the "temperature" of AUD-USD in the longer term. And, I hope these sorts of observations and posts are useful. I know many here are active traders, but I wanted to offer longer term observations for those who interested.

Cheers,

Clay

-------- Original Message --------
Subject: Re: [OpenFX] AUDUSD: Short?
From: "Jack" <jlhach7@bellsouth.net>
Date: Mon, March 07, 2011 3:39 pm
To: <OpenFX@yahoogroups.com>

Clay I am interested in learning how to use the put options.

Jack

----- Original Message -----

From: clay@claymarafiote.com

To: openfx@yahoogroups.com

Sent: Monday, March 07, 2011 1:35 PM

Subject: [OpenFX] AUDUSD: Short? [1 Attachment]

Hi Traders,

I'm watching AUD/USD for a shorting opportunity. True, it's been on a tear, going beyond parity. But, based on what I'm seeing, the aussie is setting-up for a turnaround. Per the weekly and daily charts, the technicals are point to this:

1) Rising wedge

2) MACD divergence

3) Elliott 5th wave

4) Harmonic pattern

I've attached a weekly chart highlighting the above, with the daily information, too. While I might, I'm not going to get into the fundamentals at the moment, but support what I'm seeing; I'll leave fundamentals for future posts.

If you're thinking "short", obviously you could sell AUD/USD using your spot forex account. Or, you might consider using a put option (let me know if you need more info on how to do this).

Also, let me know if this information is useful; as I continue developing the new site, obviously I only want to include those items you and other members find valuable. Mucho thanks for the feedback.

Great trading!

Clay