Decoding the Yen: Strategies for the Upcoming Expiration

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In the Yen, our 'old friend' has opened a Straddle, just like he’s done several times this year. Notably, he’s picking a 5-day expiration, which is his signature move tha twe can use to track him. So, this time, the range boundaries are as shown on the chart.

Keep in mind that this is a futures contract on the Yen, not the USD/JPY forex pair. In other words, the quotes are inverted. To get what’s on the screen, you need to do 1/USDJPY.

But it’s way easier to just use the TV options and select '6JZ2024'

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Let’s break down how the Straddle on the yen played out at expiration. First off, the price didn’t hit either side of the straddle, which is pretty interesting. On the flip side, the prices stayed within the range, so the owner of that position raked in the full premium.

Now, the big question is: how could we use the sentiment from this straddle for Forex trading?
It’s pretty clear that we were gearing up for a range in the quotes. So, the smart move would be to close out profitable positions or maybe even adjust our stop-losses to avoid getting whipsawed by those typical spikes up and down during sideways action.

If you’re on board with this line of thinking, give it a thumbs up!