CurrencyShares Euro Trust (FXE) 11/3/09 PriceWatch Alert Up To 3.19% Downside Protection

Posted: Tuesday, November 03, 2009 8:44 AM EDT

CurrencyShares Euro Trust (PCX: FXE) closed yesterday at $147.52. So far FXE has hit a 52-week low of $124.59 and 52-week high of $150.31. FXE has been showing support around 146.48 and resistance in the 148.78 range. Technical indicators are Bullish. FXE appears on the Investors Observer Select ETF and HOLDR list. For a hedged play on this stock, look at a Mar '10 147 covered call (FXE CQ) for a net debit in the $142.82 area. That is also the break even stock price for this trade. This covered call has a 137 day duration, provides 3.19% downside protection and a 2.93% assigned return rate for a 7.80% 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 '11 115 Call (XXF AK) and selling the Mar '10 147 call (FXE CQ) for a $29.30 debit. The trade has a 137 day life and would provide 2.18% downside protection and a 9.22% assigned return rate for a 25.00% annualized return rate (for comparison purposes only). [ATU-Seven Summits Research]

Click Symbol For More News On: (FXE)