As cable continues to gain, where will the real squeeze action happen?
I start with a warning. Be under no illusion that this is a proper Brexit squeeze. GBP may be taking a few short-term shorts to the cleaners but that’s about it. Real money is still sitting on the sidelines letting the kids play in the pool.
But, for some shorts, it’s all relative and a matter of context. There are shorts at vastly differing levels. Some from the Brexit vote itself, to those hitting the GBPUSD from the 1.40’s last year. Knowing where every everyone’s pain threshold is is impossible. However, the options market is beginning to show us where the real crunch points may be. Whether hedging shorts or positioning for longs, we have strong indications of where some real squeezing will happen.
This is one of the many facets of the options market that can help us with our trading. It’s a big part of what we offer in our trading platform. Knowledge is power in trading and we have the information that tells us where we should be looking in GBP. That information means we’re able to react to, and create trading strategies around this information. Not only can we create opportunities, it also serves to help us protect any trades we might be in. If used properly, market information can just as easily save us from losing money as it can help us make money.
If you want to stay ahead of the game and know exactly where the big squeeze points in GBP are, come and join the ForexFlow platform.