NaughtyPines
Short

FXE: TWO BEARISH OPTIONS SETUPS

AMEX:FXE   INVESCO CCY SHS EURO TR EURO SHS ETF
FXE 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.
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