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FXE

CurrencyShares Euro Trust (FXE) Bear Put SpreadCase for FXE Bear Put Spread Next week’s ECB meeting seems unlikley to result in increased rates tapering while the Fed is actively unwinding QE Softer EU inflation data, manufacturing PMI’s, and Italian elections keep pressure low on Draghi to tighten despite solid GDP statistics Recent US equity spike in volatility likely to be top of ECB voters’ minds. Target $112 by end of Q2 2018 but $108 if major European stress event occurs
AMEX:FXEShort
by Quantamize
FXE Successful Retest and BreakoutOn the Daily chart we see a beautiful pattern. The 113 level on FXE (EURO) has been resistance since 2015. We've tested that area 5 times. Finally in July, we broke though, came back and retested, and now we are bouncing off of that level. A beautiful pattern here. The base since 2015 has been forming for 2 years, so this looks like an amazing opportunity to get long the EURO via FXE. Momentum in the RSI is in a bullish range (over 50) and it hit oversold territory in both April and July. That is NOT a bad sign, that is a GOOD sign that there are more buyers than sellers. Target: 120, 161.8% retracement of 2016-2017 high to low Stop: 112, under the 113 breakout level Reward to Risk: 7:1, Amazing! ----------- !! PM me with any questions about my analysis !! MY TRADING METHOD: I keep my analysis simple. Good analysis always is. I use Price Patterns, Moving Averages, and RSI for my analysis. I use the 1 day for trend analysis and 60 minute for trade entry For my Targets I use Fibonacci projections + measured moves Successful trading means proper risk sizing and trading small so you can stay in the game.
AMEX:FXELong
by BerlinTrader591
THE WEEK AHEAD: FXE OR /E6, P, NVDA, AND MWith the French elections now in the rear-view mirror, the Euro is at 1.10-ish at Asian open, and I'm looking to watch and short /E6 or FXE after seeing how far the spot forex pair goes here. Typically, the currency doesn't move all that much in the Asian session, so I kind of want to see what the European market does with the news before committing to a short position, which is likely to be a straightforward short call vertical, although some tweaking to the strikes being used will be necessary now that it's at 1.10-ish. (See Post Below). Aside from that, we've got some quality earnings plays coming up this week, a few with the metrics that meet or almost meet my "smell test" (>70% implied volatility rank, >50% implied volatility). P (80/68) -- announces on Monday after market close, so look to put on a play before the NY market shutters. Due to the size of the underlying, only a short straddle or defined risk iron fly makes any sense here for a nondirectional play. NVDA (72/50) -- announces on Tuesday after market close. Short strangle or iron condor are the suggested plays with potential tweaks aimed toward limiting downside risk (e.g., Reverse Jade Lizard) so you don't get AMD'd if that's the way this cookie crumbles. M (85/45) -- announces on Thursday before market open. At $29/share, this one's a kind of "in-betweener" -- you can go short strangle/iron condor if it pays enough or agress with a short straddle/iron fly if you want the allure of more credit at the door and the option to take profit at a lower max profit percentage. Of course, it's brick and mortar retail, which as a sector has seen individual name mixed results over the past several earnings cycles (being generous here), so my tendency would be to keep setup POP% high as a trade off against bringing in more in credit to give you greater flexibility dealing with a broken setup post earnings than a short straddle or iron fly would. I'll post more concrete setups should I decide to dip my toe into one or more of these ... .
AMEX:FXE
by NaughtyPines
FXE: TWO BEARISH OPTIONS SETUPSFXE JUNE 16TH 105/108 SHORT CALL VERTICAL The first of the two setups is a "static" short call vertical with a break even around 106 resistance. Metrics: Probability of Profit: 58% Max Profit: $120/contract Max Loss: $180/contract BE: 106.20 Notes: Look to manage at 50% profit. FXE JUNE 16TH 107 SHORT CALL/SEPT 15TH 110 LONG CALL DIAGONAL This particular setup gives you some more flexibility in the event we do get some bullish movement in the short term, since you have opportunities to roll the short call for duration and credit during the life of the setup. Unfortunately, the vast majority of metrics for a diagonal are indeterminable from the outset, although the short call here, standing alone, has a probability of profit of 67%. This gives you a fairly high probability that you can completely finance the cost of the long in short order. Metrics: POP%: -- Max Profit: -- Max Loss/Buying Power Effect: $293/contract Notes: Look to roll the short call out for duration when it approaches 50% max profit to the next expiry in which you can receive credit for the roll.
AMEX:FXEShort
by NaughtyPines
THE WEEK AHEAD: EWY, FEZ, FXE, AND OIH/XOP/XLEWith VIX in another ebb and a paucity of high quality premium selling earnings plays in the making for next week with both high implied volatility rank and high implied volatility, I'm looking at exchange traded funds instead for potential plays. For instance, EWY, the South Korea exchange traded fund, makes sense in the current geopolitical environment, and its implied volatility rank and implied volatility reflect this, coming in at 55/22. It doesn't meet my usually standards of >70 and >35, but sometimes the market doesn't allow you to be picky. The June 16th 56/59/65/68 iron condor brings in .81 at the mid (not quite up to my usual 1/3rd the width of the wings snuff); alternatively, the June 16th 57/62/62/67 iron fly brings in 2.76. A drawback is that this instrument only has monthlies, a situation I'm not fond of ... . With French election finals on the horizon on May 7th, another play that makes sense against the backdrop of "news," is FEZ (Euro Stoxx 50) (49/21). However, I previously attempted to get a fill of an iron fly before the primaries, and it was quite pesky, particularly on the call side. Currently, I'm unable to get a mid price quote for the June 9th 34.5/37.5/37.5/40.5 iron fly or a similar setup in the June 16th expiry due to the fact that the long calls where I want to set up are no bid. With FXE (the Euro proxy), which I tend to play as I would play EURUSD, I would go directionally short. The background implied volatility is so low that it just doesn't make sense as a straightforward premium selling play since the contraction that's usually a feature of these plays is likely to be minor; moreover, I have a directional assumption in a tightening Fed environment versus a loose to easing ECB environment (bearish). There are a couple of ways to play it: (a) ATM short call verts where the break even is around 106 (e.g., the June 16th 105/108 short call vert; 1.20 cr; BPE 1.80; BE at 106.20), legging in small in the event it rips higher on a Macron win (currently, the likely outcome); (b) a call diagonal that gives you some flexibility on the short call side of things (e.g., a June 16th 107 short call; Sept 15th 110 long call; .07 cr; 2.93 BPE) without exposing you to downside risk in the event that the Euro caves in at some point on dollar strength or Euro weakness. Lastly, I've got eyeballs on oil. It's dipped somewhat dramatically off highs, so I'm looking at various bullish plays in OIH, XOP, and/or XLE, all of which track oil prices somewhat religiously. Currently, I'm still working an XOP put diagonal, but am amenable to getting into another XOP play. (Put diagonal: XOP June 16th 33 short put; Dec 15th 27 long put; .10 credit at the mid; 5.90/contract BPE; PMCC: XOP June 16th 37 short call/Dec 15th 24 long call; 10.82 db).
AMEX:EWY
by NaughtyPines
Big Lizard on FXEWith IV rank at over 46 on FXE, the expected move in 46 days is +/- 2.61 (Prices at 106.01-100.79). If I sell a Big lizard, my break even on the downside would be just below the expected move and we don't have risk to the upside (In case it wants to pull back to the 200 EMA). Sold the 103 Straddle with upside protection buying the 105 call with 46 days to expiration on FXE. The trade: Short 103 Call Short 103 Put Long 105 Call Credit $2.25 Break Even at 100.75 74% probability of profit
AMEX:FXE
by AlexanderGotay
ATM Ratio spread on FXEWith the IV rank above 50 on FXE its a good time to sell premium. I could do a Strangle or Straddle, but since we are at an extreme and very far from the 200 EMA I don't want the risk to the upside. So I will be making a at the money Put ratio spread. Selling 2 of the 102 Puts to finance one of the 104 Puts. This way we have a 69.5% chance to make money at expiration with no risk to the upside. If we manage early we can bump it up to around 90%. Max Profit $227 per contract, will look close at 25% of credit received. We make money as long as we stay above 99.73 in the next 44 days.
AMEX:FXE
by AlexanderGotay
IS IT TOO LATE TO SHORT THE EURO/FXE?As a large time frame trader, my tendency with the Euro or with its stock proxy FXE, has been to short it on strength given the cycle of ECB easing and Fed tightening. The shorts I have taken have been been few and far between since early 2015, having all been taken around EURUSD 1.150. Given the fact that we are at or near long-term support (the Oct 1997/Mar 2015 lows) and the near-term downside target remains subject to discussion, I would be hesitant to short from here since the reward is somewhat indeterminable, in spite of the fact that the next "obvious" swing low would be the Oct 2000 lows at .823 (although a number of traders are liking parity from a purely psychological standpoint). Naturally, both targets would pose juicy rewards for the longer term trader who's willing to hang in there through the probable Dec Fed rate hike and probable rate hikes thereafter on top of possible further ECB easing or, at the very least, maintenance of a dovish tone. My hesitancy to short here derives from the fact that the Euro has staged substantial rallies in response to short-term exogenous events (May 2015 to 1.146; Aug 2015 to 1.171; May 2016 to 1.161) before tumbling precipitously. For my part, I'm going to wait for another one of these "exogenous event" spikes to short rather dipping my toe in here on a break of 1.05 support, since the ultimate "short-term" destination remains to be seen ... .
Short
by NaughtyPines
SUB-15 VIX SPELLS A CONTINUATION OF THE BREAK IN PREMIUM SELLINGUgh. In spite of abysmal non-farm payrolls, the week ended with the VIX still in sub-15 territory, meaning that less than 45 DTE premium selling in the broader indices is "off the table" for another week in the absence of something earth-shaking occurring in the markets here. This could come in the form of the most recent "Brexit" referendum poll, which shows the "Brexit" vote moving into a narrow lead over the "Bremain" constituency, albeit with a fairly large number being currently undecided (43% Brexit; 40% Bremain; 17% unwilling to commit to a camp). (GPBUSD is off 100+ pips in early Asian trading; the Euro, largely unfazed). Aside from broader market instruments, there is nothing popping in the ETF space or in individual underlyings for me to play. My "picky" standards are for an implied volatility rank of 70% plus, a greater than 50% implied volatility, and relatively high options liquidity, and there hasn't been an underlying that meets those criteria in several days. GDX and GDXJ, however, continue to flirt with an implied volatility rank in the 50-65 range, which could easily have them pop to the forefront here and make them playable in the next several days depending on what happens with gold here (it popped on the poor non-farm's). And so, I continue to watch for a bit and manage the trades I've got on now. Here's what I'm gandering at: FXE/EURUSD: With the Euro, I'm looking for price to revisit 1.14+ to get in short via an FXE directional play (so pissed that I missed that spike to EURUSD 1.16), but I want to wait and see how the Brexit uncertainty plays. TBT/TLT: People just don't want to give up their treasuries here, in spite of the fact that we're quite close to all-time highs in the S&P. In a tightening environment, the general notion is to short treasuries, but if TLT is here at this point in the S&P's trajectory, where's it going to be if the market engages in a modest corrective dip? Higher, so best to wait for TLT to digest the crappy non-farm's for a directional play short or, inversely, a directional play long in the inverse TBT. VIX/VIX Derivatives: The long vol trade has been disappointing, to say the least, in the short term. Volatility has absolutely caved and contangoized instruments like VXX and UVXY have given up even more. However, there still might be long vol opportunity here, but I'm going to be awfully picky since I already have some long VXX trades on. I'm still looking for the golden sub-12 "moment" in VIX to go long in that instrument with something akin to what I set up in VXX -- a poor man's covered call with the back month far out in time and deep in the money and the front month at the 75% probability out of the money strike. Naturally, we may never get there ... . Oil: I'm looking for short opportunities if I can get them or, in the alternative, a premium selling play on high implied volatility in one of the oil ETF's (XOP, OIH). It looks sideways or consolidative here, and the implied volatility in the ETF's I ordinarily play isn't enough to bother with yet ... .
CBOE:VIX
by NaughtyPines
TRADING IDEA: FXE JULY 15TH "SUPER BEAR"There are basically two variations on a "Super Bear," the first uses a short call to finance a long put debit spread, the other uses a short call credit spread to do the same thing, the difference being that a naked call Super Bear is an undefined risk trade, while a call spread Super Bear is defined. In this particular case, in order to be capital efficient, I'm opting for trying to get a fill on a "Call Spread Super Bear." I'm doing this instead of just a short call credit spread due to its enhanced return on capital characteristics and FXE's historical habit of breaking down to 106; this setup will allow me to get the "boom" out of the short call spread, as well as the "kapow" out of the long put debit spread. Here are the metrics: Probability of Profit: 35% Max Profit: $413/contract Max Loss/Buying Power Effect: $387/contract Break Even: 112.13 In this particular case, you actually receive a small credit for the setup ($13 at the mid price). Notes: Here, the probability of profit is somewhat horrid. However, in this particular case, I take it with a grain of salt, since I not only have a firm directional bias in FXE/EURUSD, I regard the 112 to 112.50 area in FXE (comparable to 1.1450-1.500 in EURUSD) as long-term resistance from which it has repeatedly retreated. That being said, in the event I am "somewhat wrong" as to my timing, I'm opting to go farther out in time to give the trade time to develop and to envelope not only the Brexit vote, but also a possible FOMC June rate hike, which will strengthen the dollar and cause EURUSD and FXE to fall. The ideal outcome is for price to finish below the 108 short put at expiry, but I would look to take the entire setup off as a unit for some significant percentage of max profit ... . Naturally, it is also possible to strip off the debit spread (assuming it moves into profit on a break of the 108 short put) first, allowing the short call credit spread to expire worthless if that scenario comes to fruition prior to expiry.
AMEX:FXEShort
by NaughtyPines
WHAT I'M LOOKING AT NEXT WEEK: MON, EWZ, VIX PRODUCTS, FXEWith VIX at sub-14 levels and without much on the earnings calendar that is ideally playable with options from a premium selling standpoint, next week is likely to be a schnooze in the absence of a broad market volatility pop. Nevertheless, there are a couple of plays I might consider. MON: MON announces earnings on April 6th before market open. With an implied volatility rank of 58 and implied volatility of 32, it's not looking all that sexy for premium selling at the moment, with the preferred rank/IV metrics being >70 and >50, respectively. Nevertheless, the run-of-the-mill short strangle is offering up more than 1.00 credit ($100)/contract in premium at the moment, so it might be a worthwhile play (April 15th 81.5/94 short strangle). EWZ: The Brazil ETF still has a bit of "kick" in it, with implied volatility rank at 72 and implied volatility at 58. For lack of premium selling elsewhere and to offset in part a tested iron fly setup I have on (see Post below), I've dispersed risk by laddering setups in this underlying (short strangles/iron condors) through several expiries, which doesn't tie up much buying power given the price of the underlying. VIX/VXX: With VIX at these levels, I'm considering loading additional long positions here, although I don't want to go all crazy large at once. My setup of choice has been VXX long-dated diagonals/synthetic longs/poor man's covered calls with the back month long option in the September expiry, which allows me plenty of time to be right without having to leg into and out of, for example, short put verticals repeatedly. This also allows me to "swim with the tide" with the short call, since we're in contango here, which exerts a downward pressure on price (although this also affects the value of the long-dated option in the short term). (See VXX Posts, below). As a side note, I'm avoiding plays in leveraged products like UVXY and SVXY due to pending SEC regulations that may affect these instruments. Although these regs are mainly focused on 2x and 3x leveraged products, I don't want to be in any leveraged product with a long-term setup whose liquidity and/or viability might be affected by implementation of the regs. FXE: With the Euro hovering slightly below my sell area (1.14), I'm looking at getting into the Euro proxy FXE with a short play of some kind going forward. However, it may pay to be patient here, since we've have had "dovish gruntings" from the Fed which may put a damper on Greenback strength for a bit of time, as well as some modestly positive ECB data. As compared to spot, I could still potentially pull the trigger on a short FXE setup of some kind here, steering well clear of recent strength areas (e.g., 8/24 "risk off" spike to 114.81 or the Fib line at 116-ish).
AMEX:FXE
by NaughtyPines
TRADING IDEA: FXE MAY 20TH 111/JUNE 17TH 113 LONG PUT DIAGONALI don't frequently put on debit spreads, but here's an instrument in which I have a fairly firm directional bias and which, additionally, has extremely low implied volatility at this point in time, making it ideal for either a calendar or a diagonal, both of which benefit from expansions in volatility (which will occur in the instrument assuming further weakness in the Euro and/or Greenback strength). Here's how the setup plays out: (1) Going into expiry of the short option, price stays above the short put, at which time you generally roll it to create a long put vertical with the back month expiry; (2) Price breaks below your short option, at which time you take the entire setup off in profit when the opportunity presents itself, but prior to the expiry of the short put. There aren't really any metrics to present for this kind of spread, beyond the fact that this will cost you a 1.54 debit to put on ($154), which represents your max loss in the setup. This is because maximum profit will be dependent on how much the underlying moves for the duration of the setup ... .
AMEX:FXE
by NaughtyPines
FXE/EURUSD -- WATCHING FOR THE SAME THING AS BEFOREOkay, okay, okay ... . So I've griped on occasion about trading FXE as the EURUSD proxy (no volatility, not good for premium selling, blah blah blah). But I can't help but think that I might get an another opportunity to short FXE on one of these weak dollar/risk off spikes. We're three points away in FXE, so I might get a shot ... . Keep an eye on the long-term horizontal resistance at between 112 and 113 and erect short call verticals with strikes clear of that level if we get there (e.g., 113/116, 114/117), assuming you can get a decent credit to do so ... .
AMEX:FXEShort
by NaughtyPines
EURUSD -- LONG TERM HORIZONTAL SUPPORT AT 1.1425-1.1500-ISHUnfortunately for me I guess, I don't trade spot forex anymore, but I do keep an eye on the majors, particularly EURUSD, because I can trade that using options via FXE, the EURUSD proxy. I have traded FXE a total of five times this year, but it's always been about selling into strength; given Fed tightening and ECB easing, it's always been short with short call credit spreads in FXE when above EURUSD 1.14-ish. Were I to still be trading forex, I would look to initiate short positions between 1.1425 and 1.1500, targeting 1.10 to the downside ... .
Short
by NaughtyPines