• Hot Tips Archive
Mad Hedge Fund Trader
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us[email protected]
  • Login
  • Search
  • Menu

Why I Covered My Euro Short

Diary

I am taking my profit in the Euro (FXE) December $140 puts this morning, nailing the high of the day at $5.70, and clocking a stunning three day profit of 107%. This adds 5.63% to the year-to-date return for Macro Millionaire, taking us up to 46%. Non option players who bought the short Euro ETF (EUO) made 9.5%.

My net profit on the trade was $2.95. For the model $100,000 portfolio this works out to $5,310 ($2.95 X 100 X 18). And we made this return while keeping 76% of our money in cash, out of harm?s way.

This was a perfect trade in so many ways:

*For a start, I got a great entry point on top of a 10 cent rally in the Euro.

*The position was a great indirect ?RISK OFF? hedge for my sole remaining ?RISK ON? position in the (TBT). For every $1 I lost in the (TBT) since the Thursday high at $23.00, I made $2 on the Euro short.

*We got an assist in the bankruptcy of MF Global, which resulted in the liquidation of their entire $6.5 billion portfolio of Euro bonds, which put additional pressure on the European currency.

*We got a second assist from my friends at the Bank of Japan, who rushed to deflate the yen with a massive $130 billion round of intervention.

*I resisted the temptation to take a quickie 30% profit yesterday, believing that the trading community was caught badly off balance in their positioning, and that there was enough juice to take the Euro to my secondary target of $1.36.

*My friends at the People?s Bank of China told me they would take my advice and take down a big slug of any bond issue resulting from the European sovereign debt resolution. However, they said they would also take my advice and hedge out their Euro risk, making the trade currency neutral.

*I initially put on the trade expecting European Central Bank President, Mario Draghi, to cut interest rates tomorrow. With the Euro at $1.3630, I now don?t care if Mario has pasta al dente for lunch, a canole for desert, and sings O Solo Mio tomorrow. I can take my money and run at let the rest of the market run the overnight event risk. If Mario then fails to act tomorrow, I will simply resell the Euro higher up.

*We caught one of the sharpest moves in the history of the foreign exchange markets, some 5 cents in the Euro, in three trading days. You shouldn?t need to be told twice to cash in.

*No one ever got fired for taking a three day profit of 107%. Possession of the cash is 9/10ths of the law.

I know that some of you made more money on this trade than I did, because the $140 puts traded all the way down to $2.47 after the initial opening alert. No whining about not being able to get in this time. As they say down under ?Good on You!?

If you missed this trade for whatever reason, don?t chase it here. Another opportunity will come along. There are plenty of fish in the sea.

 

 

 

November 3, 2011/by DougD
Share this entry
  • Share on Facebook
  • Share on Twitter
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://madhedgefundtrader.com/wp-content/uploads/2011/11/gold.jpg 219 343 DougD https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png DougD2011-11-03 01:53:312011-11-03 01:53:31Why I Covered My Euro Short

Archives

  • 2021 (131)
    • January (131)
  • 2020 (2096)
    • December (174)
    • November (184)
    • October (169)
    • September (177)
    • August (171)
    • July (169)
    • June (186)
    • May (193)
    • April (202)
    • March (187)
    • February (152)
    • January (131)
  • 2019 (1774)
    • December (134)
    • November (128)
    • October (168)
    • September (128)
    • August (173)
    • July (138)
    • June (113)
    • May (159)
    • April (169)
    • March (169)
    • February (141)
    • January (153)
  • 2018 (1801)
    • December (150)
    • November (158)
    • October (196)
    • September (131)
    • August (150)
    • July (133)
    • June (128)
    • May (162)
    • April (185)
    • March (155)
    • February (153)
    • January (100)
  • 2017 (520)
    • December (96)
    • November (114)
    • October (52)
    • September (47)
    • August (63)
    • July (38)
    • June (52)
    • May (58)
  • 2016 (1369)
    • December (116)
    • November (107)
    • October (133)
    • September (110)
    • August (125)
    • July (98)
    • June (111)
    • May (142)
    • April (119)
    • March (112)
    • February (91)
    • January (105)
  • 2015 (1290)
    • December (98)
    • November (94)
    • October (89)
    • September (106)
    • August (105)
    • July (87)
    • June (72)
    • May (101)
    • April (134)
    • March (145)
    • February (122)
    • January (137)
  • 2014 (1490)
    • December (112)
    • November (107)
    • October (151)
    • September (120)
    • August (110)
    • July (123)
    • June (109)
    • May (117)
    • April (129)
    • March (153)
    • February (130)
    • January (129)
  • 2013 (1601)
    • December (125)
    • November (176)
    • October (172)
    • September (162)
    • August (131)
    • July (140)
    • June (114)
    • May (123)
    • April (146)
    • March (123)
    • February (87)
    • January (102)
  • 2012 (781)
    • December (23)
    • November (18)
    • October (24)
    • September (78)
    • August (90)
    • July (67)
    • June (68)
    • May (97)
    • April (88)
    • March (86)
    • February (77)
    • January (65)
  • 2011 (449)
    • December (59)
    • November (73)
    • October (23)
    • September (31)
    • August (44)
    • July (34)
    • June (14)
    • May (43)
    • April (20)
    • March (42)
    • February (29)
    • January (37)
  • 2010 (356)
    • December (32)
    • November (45)
    • October (45)
    • September (51)
    • August (58)
    • July (43)
    • May (6)
    • April (1)
    • March (35)
    • February (17)
    • January (23)
  • 2009 (252)
    • December (20)
    • November (18)
    • October (22)
    • September (20)
    • August (15)
    • July (19)
    • June (20)
    • May (20)
    • April (19)
    • March (22)
    • February (19)
    • January (38)
  • 2008 (420)
    • December (38)
    • November (36)
    • October (46)
    • September (40)
    • August (34)
    • July (38)
    • June (36)
    • May (42)
    • April (42)
    • March (28)
    • February (40)

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 © 2021. Mad Hedge Fund Trader. All Rights Reserved. [email protected]
  • Privacy Policy
  • Disclaimer
  • FAQ
Watch Out for the Chihuahua Glut Testimonial
Scroll to top

This site uses cookies. By continuing to browse the site, you are agreeing to our use of cookies.

OKLearn more

Cookie and Privacy Settings



How we use cookies

We may request cookies to be set on your device. We use cookies to let us know when you visit our websites, how you interact with us, to enrich your user experience, and to customize your relationship with our website.

Click on the different category headings to find out more. You can also change some of your preferences. Note that blocking some types of cookies may impact your experience on our websites and the services we are able to offer.

Essential Website Cookies

These cookies are strictly necessary to provide you with services available through our website and to use some of its features.

Because these cookies are strictly necessary to deliver the website, refuseing them will have impact how our site functions. You always can block or delete cookies by changing your browser settings and force blocking all cookies on this website. But this will always prompt you to accept/refuse cookies when revisiting our site.

We fully respect if you want to refuse cookies but to avoid asking you again and again kindly allow us to store a cookie for that. You are free to opt out any time or opt in for other cookies to get a better experience. If you refuse cookies we will remove all set cookies in our domain.

We provide you with a list of stored cookies on your computer in our domain so you can check what we stored. Due to security reasons we are not able to show or modify cookies from other domains. You can check these in your browser security settings.

Google Analytics Cookies

These cookies collect information that is used either in aggregate form to help us understand how our website is being used or how effective our marketing campaigns are, or to help us customize our website and application for you in order to enhance your experience.

If you do not want that we track your visist to our site you can disable tracking in your browser here:

Other external services

We also use different external services like Google Webfonts, Google Maps, and external Video providers. Since these providers may collect personal data like your IP address we allow you to block them here. Please be aware that this might heavily reduce the functionality and appearance of our site. Changes will take effect once you reload the page.

Google Webfont Settings:

Google Map Settings:

Google reCaptcha Settings:

Vimeo and Youtube video embeds:

Accept settingsHide notification only