FXI JUNE $36 PUT UPDATE

This is a new position entered on 5/14. Yesterday the position was at a double digit gain of +16% for less than a day of exposure. I typically use options as a tool to leverage a trade in which there is a good signal/set up, but the duration may not make the profit potential worthwhile, I don't use options as a lotto ticket, trying to hit triple digit home-runs (although I wouldn't scoff at one). I also use at least 2-3x more time (expiration) than I think I'll need and typically in the money, in other words buying quality over a lotto ticket and have turned around my options trading after years of swearing them off from not very impressive to a very useful tool.

As for FXI, FTSE Xinhua China 25 Index (long) , the put position is a shorter term trade. You could use FXP FTSE Xinhua China 25 Index Ultrashort (long) to achieve the same directionality with the less leverage as FXP is an UltraShort (2x leverage).

I do like FXP as a longer term position and we have been in it recently for that position, but closed the trade when it looked like it was going to pullback. I will look at re-entering FXP on a longer term basis (the options trade is typically for a shorter term duration position) soon.

As for the charts this morning as FXI did gain +0.73% today, I'm still not concerned about the position on a short term basis and will leave it open. If I felt stronger about the position I'd probably add to it here, as for a new position, it may be worth a look in the area.

 FXI 1 min leading negative, on an intraday basis the 1 min looks like this...

The bounce this morning has moved to a flat range where we often see distribution (or accumulation) just when price action seems the most uninteresting.

 The 2 min chart is leading negative and displaying a PERFECT example of a divergence, price moving one way, 3C the other, suggesting strong distribution in to the bounce.

The 3 min chart is also leading negative and hitting new lows today intraday, thus migration of the divegrence from the 1 min intraday chart seems to be strong thus far, meaning the distribution is getting stronger.

And the 5 min chart leading negative.

If we had some intermediate charts in the 10-15 min range that were as negative as these, I probably would have entered FXP long rather than FXI short (puts), again it's about the duration and leveraging the trade to make it worthwhile when the duration of the trade looks to be shorter.

So far, I'd say so good.

FXI puts may be worth a look or an FXP long if you are not a fan of options, however I'd rather wait on the FXP long until intermediate charts are as ugly on FXI as the 1-5 min charts.