@destriero Just curious, why the sudden change to a conviction macro position? You've always done well in single name vol, why not just up size there if you are on a roll. Short banks or long ZN/ZB would work for your thesis, why specifically FX?
Looking at my cycle analysis long term, I think you will do well. My historical charts show cad getting stronger over usd well into 2020. Going to take a lot of patience.
Was this done with SPOT FX or Futures or options on these? Do you have a hedge? If CME futures, Looks like about 200 futures and about $220,000 in the initial margin. Sound about right?
Likely spot fx where you can get 400 to 1 leverage outside USA. If there is some kind of flash crash against him, the margin call would be massive.
Not sure what type of flash crash you will get in the USD-CAD pair. There is a reason why the margin is only 1.1% on the CME. I'm not going to guess if he used some off shore FX bank or used a US bank, options, futures or options on futures. That was why I asked. I find myself less interested in the bet and more interested in what set up he used and what his risk management is in case he is wrong. "margin call would be massive" -Well, that is a matter of scale. If this is a futures account and he had $300,000 in cash or T-bills, and his equity overall is $300K, that is risky. If he has $3mm, it is not a "big" bet.
The potential for the U.S. to be perceived as the cleanest dirty shirt looms large, hence attracting funds as the world sinks into ZIRP oblivion. It seems every day brings another hot potato to juggle. https://wolfstreet.com/2019/08/30/c...state-purchases-as-yuan-falls-to-11-year-low/
Well, yes, that is my typical MO. Not in this case. I know his name and email, and would just contact him directly or PM him on ET. The trader in me does not care about his bet. I'm not looking to follow him. I find it more interesting how an experienced trader with a thesis chooses to follow through with risk capital. I'm not interested in the future of USD vs another currency. I have been in this business for a LONG time. I have seen too many traders be right, but lose money or not make enough, through poor choices, miss allocation of capital, poor risk management and over or under leveraged.
He said he is short $20 million. That is leverage, not cash. And high leverage. Plus in his first post he expects this to make him seven figures. $20 mil is already 8 figures. At $500 per 1 lot ($100000) he would have to have $100k to open a trade of 20 mil. Of course, he would have to have more to handle some draw down