AUTOREFRESH 
Thankfully August is now behind us
By Sean Lee || August 31, 2009 at 21:13 GMT
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Hopefully this means that ultra choppy markets are now behind us. I found it virtually impossible to sit on good positions but really easy to stick with bad ones and I hope this is one trend which is about to change.
AUD/USD might be the pair to watch during this session. The stops above .8500 are said to be very large and we suspect (but have no definitive confirmation) that there is a big option barrier at the figure.
Good luck today.
Newbie questions here…if the stops above .8500 are large, this means there are sell orders that are thinking that if it gets that high, it’ll be headed higher? And what is an option barrier? Thanks. I’m still trying to figure out forex-ese.
Good morning. You can get some info on barrier options in our jargon section. There are lots of different types but basically it is in one players interest that the market does not trade at .8500 within a certain time frame. They will sell heavily to protect the level and the other party will buy heavily to try and trigger the option. The pay-outs on these types of bets can run into the tens of millions and that’s why they are protected. On the first point, yes there are lots of short positions who hope that a top will form below 85 but if it breaks, then they will bail out.