As mentioned yesterday here’s a version of straddle that can profit from big volatility moves with little downside risk exposure — you may have to link to the original post to view the chart in full detail: http://etfprophet.com/eurusd-straddle-patience-pays-off/
Also note the links to the original post that details nuances of this trade.
Non-FX traders are handicapped in attempting to implement this impulse move since most of the flatline channel typically sets up in the overnight Asian session. This trade could otherwise be considered a narrow range breakout, the difference being that this setup occurs on the EUR/USD about once every 3 days, while in the equities markets such frequency is hard to find.
Keeping in mind that the trade is designed for an intraday timeframe, an alternate approach to the EUR/USD target is VXX and Thursday we’ll look at how such a straddle can be setup and executed. A nice feature of these VXX straddles is their ease of scalability and the ability to use a rich open interest ($ .10 typical spread) option chain to both implement and hedge the trade.
