Trade review: short sterling

I closed out my short sterling position on 13 May (see here for original trade analysis and here for close post), following the release of the BoE’s Inflation Report. I was concerned that the BoE was taking a more dovish tone and that the risk/reward to the front end was shifting. Having spent some time reviewing the BoE’s comments (here), I now think that not much has changed, so will look to re-engage on a dip.

Here is how the trade performed:

Initiated: 24 March; Close: 13 May

What was it: sell 100K each of L Z5, L H6, L M6.

Summary table:

short sterling close

While I closed out well short of my target PnL, the skew was so extreme on this trade, that I still finished with a very health profit.

Chart of shift in expected rate path between initiation and close (and showing the slight retracement since close):

uk short sterling close chart


One thought on “Trade review: short sterling

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s