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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