Below you can find a sample of one of our Trade Alerts.  This is an actual trade that was recommended in Currency Options Insider back on January 7, 2008.


January 7, 2008

Strategy:

  Buy Australian Dollar March 90 Calls at $0.90 or better (.XDACO)


Outlook:

The Australian Dollar is currently trading at $87.17 and is poised to move higher. On a global basis commodities continue to surge to new highs.  This macro trend is a huge benefit to the Australian economy.  A major portion of their economy is tied directly to the production of commodities.

To top it off, one of Australia’s major trading partners is China who is buying everything they can get their hands on.  Growth in China will continue to drive growth in Australia.  In addition, Australia has the highest interest rate of all of the major world currencies, making them a candidate for implementation of a carry trade.

These factors make the Australian Dollar an attractive intermediate term trade.  Short term moving averages are providing positive signals.  The longer term moving averages have leveled suggesting a consolidation is taking place with a potential breakout to the upside.


Trade Details:

Option Ticker Symbol:	.XDACO
Underlying Currency Symbol:	XDA
Current Bid-Ask Price:	$0.58-$0.68
Option "Buy Up To" Price:	$0.90
Break-Even On Currency:	$90.90
Maximum Risk Per Contract:	$90

Exit Strategy:

I can see the Australian Dollar retry the highs it set back in November around $93. Aggressive traders will watch closely as we approach those levels.  Conservative traders should look to exit around the $90 level.  Look for resistance around the $88.50 level and the $90.50 level. Support is evident around $87.