FxWirePro: Speculate with USDJPY binary puts in tight range; but PRBS assures hedging

Intraday trend seems weaker on this pair as Relative Strength Index converging falling prices and %D line crossover ion slow stochastic.

On EOD charts, the formation of 3 white soldiers candlestick pattern assures shift in momentum and can now be interpreted as an end of intermediate bear trend.

For today, one can see buying opportunity in binary puts as the downswings are expected during intraday trades.

But on hedging front, even though reversal trend is indicated, anyone who expects opposite directional moves in this pair can arrest short-medium term downside risks of USDJPY hedging through deploying option strategy: Put Ratio Back Spread

Expect the underlying currency cross USDJPY to make a reasonable move on the downside in medium terms.

For short term hedgers the recommendation would be; Purchase (1%) OTM puts and sell fewer puts of a higher strike (ATM or ITM) usually in a ratio of 2:1, 3:2 or 3:2.

This is more attractive strategy, basically, as you're selling an at-the-money short put spread in order to help pay for the extra out-of-the-money long put.

The higher strike short puts finances the purchase of the greater number of long puts and the position is entered for no cost or a net credit.

Keep an adequate time for maturity so as to make a substantial move on the downside.