Abnormally low volatility was the major reason we suggested buying June $1.13 euro calls in late January. Extremely high volatility — signaled by the euro’s rapidly widening Bollinger Bands — is our signal to exit. Stock index futures locked limit-down last night, hammering the dollar and helping the euro. It’s been a long time since we’ve seen this kind of volatility expansion in a reserve currency. Who knows what the balance of today’s full-moon session has in store?

Data Source: Reuters/Datastream

 

As the chart above illustrates. The common currency soared overnight, coming within a hair’s breadth of our initial $1.16 objective. The June $1.13 calls we suggested purchasing for around $550 are currently bid at $3,425. RMB trading customers who took our suggestion to buy these calls should consider exiting at least part of your positions now. Prices can and will change – especially today – so contact your RMB broker for the latest.

 

We’ll have more on last night’s meltdown in stocks and crude oil as the week progresses. Crisis tends to breed opportunity. We expect more than one will arise. Until then, be careful out there!

 

Please be advised that you need a futures account to trade the markets in this post. The RMB Group has been helping its clientele trade futures and options since 1991. RMB Group brokers are familiar with the option strategies described in this report. Call us toll-free at 800-345-7026 or 312-373-4970 (direct) for more information and/or to open a trading account. Or visit our website at www.rmbgroup.com.  Want to know more about trading futures and options? Download our FREE Report, the RMB Group “Short Course in Futures and Options.”

 

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The RMB Group

222 South Riverside Plaza, Suite 1200, Chicago, IL 60606

 

This material has been prepared by a sales or trading employee or agent of R.J. O’Brien & Associates (“RJO”)/RMB Group and is, or is in the nature of, a solicitation. This material is not a research report prepared by a Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

 

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The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO/RMB believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.