To 1.2000 from 1.1250 in moments, but it wasn't a secret

The collapse of the 1.20 EUR/CHF floor is a seminal moment in FX but there isn't as much talk anymore about when it was created.

Looking through our archives, there was so much evidence it was leaked but even a scandal doesn't do enough to justice to the volatility around the decision. In the month beforehand, it was bouncing around like the Turkish lira as the SNB attempted to intervene without making a hard line in the sand.

The announcement came on September 6, which was a day before the September 7 scheduled meeting. Many were expecting some kind of intervention announcement but word on the SNB plan got out (Mrs Hildebrand sure seemed to know) and it was implemented early.

Gerry posted about it at 8:05 GMT, a few minutes after the announcement. What's incredible is that just 8 minutes before the announcement, he was posting about buying in short-dated 1.14 calls (the pair was trading at 1.1250).

Aside from the leaks, there was ample reason to think something was coming. Less than a month before the announcement, Thomas Jordan, who was Hildebrand's deputy at the time) was publicly talking about it.

Another angle that doesn't get much attention is gold. It hit the all-time high of $1921 on Sept a few hours before the announcement and then crashed down to $1859 afterwards and has continued lower ever since.

Immediately after the decision, the skepticism started about whether it would hold. Most didn't think it would last +3 years. Others worried about inflation. Rumors of a 1.30 floor spread.

A few hours after the SNB announcement, I was pondering what would become a very popular retail trade -- buying as close to 1.2000 as possible. It would be an extremely profitable strategy for the next three years, until it wasn't.

Here was the official SNB announcement:

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