Tuesday, September 14, 2010

Yen All-Time High: Profit With FXY ETF Straddles

As we reported previously, the Yen hit a new 60-year high earlier today. The Bank of Japan is likely to come our swinging at this. Normally when interest rates rise a currency rises. Hint: they won't lower rates, at least not more than 0.10%!

However, they might engage in massive purchases of USDs or some other similar tactic.

Whether the Yen goes higher or lower, here are straddles for September and October:

These are computed with StraddlesCalc Tool, whihc shows that a move of about 1% is all that is needed for the position to become profitable in September, or 3% for October - as long as the stock moves.

This is not advice. Options are very dangerous and may cause 100% loss.

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