FxWirePro: EUR/CAD head towards 1.5252 - straps for hedging and swing trading

If you think Euro to spike up against Canadian dollar as it took support at lower channel line and is now heading towards the target at 1.5252 levels which would be the channel line distance, then cover your underlying currency exposures with option straps strategy. The calls on option straps strategy are meant for hedging grounds with accurate timing.

No regrets those who've missed it, the recommendation goes this way, buy 15D At-The-Money delta put option and simultaneously buy 2 lots of 15D At-The-Money delta call options, one can still build the same at this juncture with an objective to achieve above targets of 1.5252. The strap is more of customized edition of combination and more bullish version of the common straddle. Regardless of the swings from here on would derive positive cash flows but more movement required on downside in order to have positive cash flows.

Hence, any hedger or trader who believes EURCAD is more likely to surge upside can go for this strategy. Maximum returns can be achievable when the underlying exchange rate makes a strong move either upwards or downwards at expiration but with greater gains to be made with an upward move. Cost of hedging would be Net Premium Paid + brokerage/commission paid.