Originally Posted by John Kicklighter

Hey FXPert,

You're hedging by price solely? Does that happen through a program or are you doing it manually? Personally, I would stick to regular time intervals because 10 points will come and go every 15 minutes if underlying volatility dries up and we get another period of range trading.

As for the USDJPY reaching 117.00, I think it has a good probability attached to it. Though the medium-term time frame (daily for me) is down, the longer term has been in a broad range or wedge, so it could easily get back up to 120 given enough time - beyond that it gets more speculative on direction. However, in your less than three-week time frame, your increasing your burden. Momentum is healthy now (and if it continues, you we could to 118 in another week's time), but we are winding down on serious event risk that will supply the dollar, yen and equities with price action (of course if we have a big upside surprise from NFPs on Friday, you could simply book profit on the position // or a downside surprise could leave your position treading water permanently). And, considering a few technicals building in the area of 116.80-117.25 (resistance zone, the October pivot, big 50% fib, 100-day SMA) technical traders may take their time in running the pair up to 117.

All that being said though, I think you position is based on both a reasonable price objective and time period; and the active hedging will reduce your risk as long as you monitor the spreads on your adjustment.

If you don't mind me asking, what program are you using to generate payout, greeks and theoretical pricing? I've been pretty disappointed by what I have seen for FX options and I don't have the technical expertise to simply adjust the free equity modeling programs for FX.