Profitsee – Future Economic Surivival

Divinations in Forex, Commodities and Economic Patterns

ATM Strike Leverage

euro-tic-values.PNG

The implied cash market leverage for an At-The-Money bine (at $50) is 1329% compared to the highest fx cash market leverage of 200%. If you were long an ATM bine at $50, the equivalant 200% cash positon would be $333. In other words, if you feel an ATM 1.3325 2pm bine was going to hold, you would receive an approx 50% discount on Hedgestreet.com for your trade. This is a leverage-calculated price.

Even if you felt the price wasn’t realstic, your stop-cover would have offered some protection. As you see to the left, the post-New Housing figure announcemen’t affect on the Euro on the 12-2pm NY EST session (per-tic time frame). The maximum leverage on Oanda.com is 50% which gives a equiv. cash position of $1330 on 50,000 units. Each 1 pip = $5, 10 pips = $50. Say you sold a 3225 2pm. You see the price went to 3339 approx. Your loss is binary-static; your follow-up action would be to spread long 5 pips.

Theoretically, a potential 5-pip loss over 2 hours would yield a “10-pip” gain on the 3325 2pm bine. As you see in the graph, your cover-loss spread would have been egagined at 1.3330. The breakeven would have been 1.3338. Is this noise? Take your 5 pip profit in cash and wait till prices go back to <$50 on the 3325 bine. Your profit would be your Cash Pips – the noise factor. Or would you want to implement the tight stop? as each tic up represents your net profit.. But, alas, as the case may be, you’ve paid for the privledge to play this small range up , waiting for it to come down to the bine, then up again in cash.

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