FxWirePro: Square-off longs in NZD/JPY put ladder – buying clarity to be confirmed, stay on with backspreads

We like to reiterate that it was specified that short term northward direction 14th August and from then steep slumps expected thereafter.

It has shown the effects of steep slumps until 72.402 levels, having said that long term dips are most likely, so with a mindset of swing trading short put ladder strategy was set up, so far it's been performing desirable results and we advise now to square off all positions to book profits. This is not yet a buy as the subsidiary indicators are yet to be confirmed. RSI on monthly charts still shows downward convergence, on weekly reached oversold territory but trace of buying interest. But for now we like to remain with put ratio spreads in order to follow the trend.

Currency Option Strategy: Conversion of Short Put Ladder into back spread 

Rationale: unlimited downside and limited upside profit potential

How to execute: Short 7D (1.5%) ITM put option and simultaneously hold existing longs on ATM -0.50 delta put option and one more 1M (-1.5%) OTM -0.33 delta put option.

• What does it do with current trend: Since the short put ladder has already shown its effects with unrestricted return and partial risk, their open puts should be altered as spread by shorting ITM put with shorter expiry, when the stock price makes a strong move to the downside beyond the lower breakeven, There is no limit to the maximum possible profit for the put backspread.
• How does it affect: Maximum loss for the put ratio spread is limited and now it seems unlikely as the prices have slid already substantially and it is possible only when exchange rate rallies back to the strikes of longs in the portfolio, otherwise the prevailing trend is the most likely to evidence unlimited returns.