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  • Canadian Dollar's Downturn Has Run Too Far - Citigroup [View article]
    A way to capitalize on a rise in the Canadian dollar would be a put spread on CDD - the ISE Canadian dollar FX.
    To give yourself time for the CDN dollar to get back to where it was a few months ago, I would use the month of September and the spread from the value today of $127.50 to where it was back in January with a target of $121.00
    You would buy the Sept 127.50 (.HUHUO)put and sell the $121 put (.HUHUB). This scenario will cost $278 per contract with a break-even at $124.72 and a maximum profit of $372. when the dollar hits $121. Your maximum loss will be the cost of the trade ($278) and you will lose all of it if the US Dollar is at $127.50 or higher.
    I think the CDN dollar has a pretty good chance of hitting $121. by mid-September, so the trade should end up being pretty profitable.
    Good Trading!
    Marco
    Mar 11 11:08 am |Rating: +2 0 |Link to Comment
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