It’s the holiday season, so we expect little to no big market movements this week.
The Dollar is the strongest it’s been versus the Euro in the past 28 months now trading at 1.2186. Further decline in the currency today occurred after better than expected GDP was released earlier today in the US.
If you want to have a position in the EURUSD towards a possible bounce back from these lows and not spend a lot to buy such a position, a Call Spread can be an interesting strategy.
Buying a Call spread involves buying a Call and selling a Call with a strike further out-the-money (OTM) (that is a higher strike than the buy Call leg).
A Call spread earns you money if the spot trades beyond the strike of the bought option and the profit is capped beyond the strike of the OTM Call you sold.
The current resistance level is 1.222. On expiry, the breakeven point of this strategy is 1.222 and your maximum profit is 77.7% ($213) of the premium at open beyond the 1.2246 level (also the second resistance level). This strategy is on the amount of a 1 lot per leg. The duration of the strategy is one week and will expire on Dec. 30th, before the New Year long weekend begins.
Below is the graph payout of the strategy on expiry. You may view and trade this strategy in the strategies marketplace™ on the ORE web-platform under the name “Christmas Call Spread”.
The Dollar is the strongest it’s been versus the Euro in the past 28 months now trading at 1.2186. Further decline in the currency today occurred after better than expected GDP was released earlier today in the US.
If you want to have a position in the EURUSD towards a possible bounce back from these lows and not spend a lot to buy such a position, a Call Spread can be an interesting strategy.
Buying a Call spread involves buying a Call and selling a Call with a strike further out-the-money (OTM) (that is a higher strike than the buy Call leg).
A Call spread earns you money if the spot trades beyond the strike of the bought option and the profit is capped beyond the strike of the OTM Call you sold.
The current resistance level is 1.222. On expiry, the breakeven point of this strategy is 1.222 and your maximum profit is 77.7% ($213) of the premium at open beyond the 1.2246 level (also the second resistance level). This strategy is on the amount of a 1 lot per leg. The duration of the strategy is one week and will expire on Dec. 30th, before the New Year long weekend begins.
Below is the graph payout of the strategy on expiry. You may view and trade this strategy in the strategies marketplace™ on the ORE web-platform under the name “Christmas Call Spread”.
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