• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

May 11, 2011 - From Bad to Worse for the Euro

Diary

Featured Trades: (FROM BAD TO WORSE FOR THE EURO), (FXE), (EUO), (UUP)

 

3) From Bad to Worse for the Euro. I am going to take a profit here in my short position in the euro by selling my (FXE) September, 2011 $145 puts. I don't double my capital in two days very often. When I do, I am inclined to grab it by the lapels and shake it until its gold teeth come clattering down on the ground. I don't care about the fundamentals. I don't care about the technicals. A double is the easiest thing in the world to understand. I don't even need a calculator to figure it out.

I managed to pick up these puppies in the greatest of all possible rushes at $3.50. By selling my full 5% weighting at the $7.10 I see on my screen now, I will reap a profit of 103%. For my notional $100,000 portfolio, that brings in a net profit of $5,142, or a 5.14% return, not a bad piece of change for 48 hours' worth of work. For some hedge funds, this is considered a modest year.

Normally I like to keep a position like this for a couple of months, so I don't wear out my fingertips mouse clicking my way through too many short term trades. But the truth is that we have had three months of volatility crammed into two eye popping days. That is normally how long it takes the euro to move eight cents against the dollar. The precipitous decline we saw from $1.49 to $1.42 has in fact been the sharpest fall in the European currency in many years.

By coming out of my short position here, I am also gaining a tactical advantage. If we get a snap back rally, or if Ben Bernanke can somehow keep the party going a little longer, you can sell into another rally in the euro. Initial support at the 50 day moving average can be expected. To mix up a few metaphors (editor please ignore), dry powder here is worth its weight in gold. It also makes sense to roll down the strike as a risk control measure.

If You Miss the Train, Another One Always Comes Along

-

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2011-05-11 01:40:452011-05-11 01:40:45May 11, 2011 - From Bad to Worse for the Euro

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: May 11, 2011 - Quote of the Day Link to: May 11, 2011 - Quote of the Day May 11, 2011 - Quote of the Day Link to: May 11, 2011 - How to Build a Top Link to: May 11, 2011 - How to Build a Top May 11, 2011 - How to Build a Top
Scroll to top