Interesting Action in the Eur/Usd

I hope everyone is watching the Eur/Usd right now.  We're seeing a strong move higher and it looks like it's going to test the highs of September--roughly 1.3170.  I've got a long position and have been trading in and out of some short term rallies..break outs like these are when you've got to trade heavily in the currencies.

From here, I'll be looking for intra-day rallies to open additional longs (like the opening range break set up) and then I'll look for the Eur/Usd to take out the 1.3170 high from September.

TLT 

AEGR: The Highest Implied Volatility of any Optionable Stock

Straight from Options Alert today, they announced that AEGR has the highest IV of any trading optionable stock.  The stock is at 14.17 as of the close of today.  Right now, you can sell a Oct 15 call for $2.55.  That is some serious implied volatility.  So why the IV?  Because the FDA is meeting on October 17th and October 18th to debate the risks and benefits of two experimental drugs..one of which is from AEGR.  Here's a chart:

So how does one play this?  I bought the stock and sold a call...a covered call position as it is known in the options world.  My main risk is that the FDA announces something negative and the stock gaps down.  The FDA is meeting on the 17th and 18th and the option expires on the 18th, so I'm betting that either good news is released early or no news is released prior to expiration.  The ideal situation will be for the stock to trade up to the $15 area by next Wednesday and be able to cover the call after some loss of time value and hopefully some loss of IV.  We'll see.  This is one of those longer shot trades that you don't want to allocate too much to, but it's just attractive enough to nibble on.  I'll post an update on it next week.

TLT

Romney Coming Back on Intrade

At this point, everyone seems to be in agreement that Romney won the debate...I'm pretty sure that was the consensus going into the debate as well.  The interesting thing that I noticed is that after selling of heavily for the last month, the Romney To Be Elected President contract on Intrade is rising again.   In fact, check out the price action on the day of the debate..a big rise on much larger volume.  

It will be interesting to see how predictive Intrade was once this is all over.

Have a great Friday!

TLT