FxWirePro: AUD/NZD option strips well placed on downswings

The pair has pretty much achieved our earlier target at 1.1317, we could now foresee and maintain our next target for this pair is at 1.0937 levels towards south.

We maintain our bearish stance on this pair as the prices both on weekly and daily patterns have been well below moving average curve that signals us long term bearish trend is on the cards.

The potential target on upside is about 50-100 pips where 100-160 pips on downside, options strips are to be deployed, now have a look at the diagram fro prevailing prices of ATM puts and they are moving in line with healthy delta. We've been firm to hold on this strategy on hedging grounds, unlike spreads, combinations allow adding both calls and puts at a time in our strategy.

Hold 15D At-The-Money 0.50 delta call and simultaneously hold 1 lot of 1M At-The-Money -0.50 delta put options with positive theta values and one more put option 1M At-The-Money puts after squaring off 1^st option. The rationale is that any potential downswings should be optimally utilized, so to participate in that downtrend, weights in the portfolio should be doubled with ATM puts.

Huge profits achievable with the strip strategy when AUDNZD exchange rate makes a strong move either upwards or downwards at expiration, with greater gains to be made with a downward move.