The good: I made over 200 pips this week through various day trades and the long silver position I had entered into last week. I closed silver on average at 13.22, way below the highs of the week, but since I used silver CFDs I paid close to 13! cents in bid-ask spreads round trip. Will not trade this instrument ever again, because Comex futures offer a spread of 2 cents round trip and a commission of 23 bucks on 5000 oz position.
The bad: The markets were buyoed by good earnings reports and my AUD/USD put suffered accordingly. As a matter of fact it currently fetches less than half of what I paid for it in May.
The ugly: On Friday last week I entered a short USD/CAD at 1.1639 shortly after Canadian employment figures were released. The position went nowhere and I closed with a small profit later in the evening. However, I forgot to cancel the take profit limit order at 1.1581. You can imagine my surprise when I opened the trade platform on Monday evening and realized a long USD/CAD was executed at that price. I promptly sold a deep-in-the money call expiring on July 27 with a strike price of 1.1400 for 211 pips. During the following three days CAD strength was unrelenting, therefore I’m sitting on an option-adjusted loss of 200 pips, because I made additional 30 pips on a small counter trend rally. The position is quite small therefore I’m not too bothered with the current unrealized loss as I see scope for testing the 200 SMA, which currently rests at 1.20, in the coming weeks.
Great showing in equities caught me by surprise. Most markets rose between 7 and 10% this past week alone. NDX hit a new high for the year and Spanish IBEX also traded at the highest level of 2009. One solace so far is the fact that USD crosses did not print new lows despite such a powerful rally.
The market internals turned positive and are nowhere near overbought levels, so it would be logical to assume continuation of last week’s strength, but the sheer size of the move should open room for some profit-taking.
Tags: FX trading
