CurrencyShares Euro Trust (FXE) PriceWatch Alert Targets 13.45% Return

Thursday, December 11, 2008 8:07 AM EDT

CurrencyShares Euro Trust (PCX: FXE) closed yesterday at $130.34. So far FXE has hit a 52-week low of $124.04 and 52-week high of $160.50. FXE has been showing support around 129.29 and resistance in the 131.33 range. Technical indicators are Neutral. FXE appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Feb '09 130 covered call (FNK BZ) for a net debit in the $126.64 area. That is also the break even stock price for this trade. This covered call has a 72 day duration, provides 2.84% downside protection and a 2.65% assigned return rate for a 13.45% annualized return rate (comparison purposes only). A lower cost hedged play for this stock would use a longer term call option in place of the covered call stock purchase. To use this strategy look at going long the FXE Jan '10 110 Call (YXO AB) and selling the Feb '09 130 call (FNK BZ) for a $17.50 debit. The trade has a 72 day life and would provide 2.18% downside protection and a 14.29% assigned return rate for a 72.00% annualized return rate (for comparison purposes only). [For more information on these strategies along with more details on possible risks go to www.iotogo.com/HPWAinfo]

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