High Leverage Long Dollar Play With Limited Risk

Discussion in 'Trading' started by shortie, Aug 5, 2010.

USD In The Next 2-3 Months

  1. UP

    1 vote(s)
  2. FLAT

    0 vote(s)
  3. DOWN

    0 vote(s)
  4. I prefer to keep my opinion to myself

    0 vote(s)
  1. i would like to get some long USD exposure but i don't have much cash. so i need a leveraged trade with defined risk. this a swing trade that i want to be able to hang on to for 1-3 months.

    i am looking at UUP, maybe March 2010 calls with strikes 22 and 23 maybe. this ETF is very liquid but the options i am looking at are not. i suppose i could wait at the bid for some time since the trade is not urgent.

    PowerShares DB US Dollar Index Bullish (UUP)
    Volume 2.74 Mil 52 Week Range 22.02-25.84
  2. Why you do not buy it in forex, or as a currency futures? You can buy as little as 10K in currency futures (called micro). To limit risk you can buy a penny OTM option. There is also DX.

    One of the key parameters is your size. 1k, 10k, 1M, 10m?
  3. thanks. i will look into those. i am not familiar with forex
  4. Type, EUR in the symbol field. You should be able to see in the menu the word Forex. Then follow from there. Once you have the market, run the book screen. You will see the inter-bank market in action. Commission is $2.50 per trade. Lower in futures, but market is thinner in futures for small size.