March Swiss Franc Daily
IRA EPSTEIN & COMPANY
626 West Jackson, Chicago, Illinois
(November 10, 1997) CURRENCIES: SWISS FRANC–Today, Monday, November 10, the range of the March Swiss Franc was 60 points and the market settled at 7290. On the IraChart I have plotted out the Bollinger Bands for this contract. Notice that this market has been riding the top band for quite some time. Moreover, this market's seasonal, according to The Moore Research Report, is to break at this time of year. So, the following questions need to be asked at this point in time: Is this market overbought? How should you consider trading this market? What about January options on the March Swiss Franc?
March Swiss Franc Daily
The expiration day for January Swiss Franc options is January 9th. One way to enter into a bearish position is to do a vertical spread, also known as a “Bear Put Spread”. This type of trade is classified as having both limited risk and limited reward. The most you can lose on this type of trade is what you pay for the premium.
My recommendation is to buy the 7200 put and sell a 7000 put simultaneously. If you were to buy the 7200 put for 80 points and sell the 70 put for 32 points, the most you can lose is 48 points. The most profit you could make on this trade is 152 points. Remember, this trade has both limited risk and limited reward.
Kyle Graham
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