By: Andrew Keene
CurrencyShares Australian Dollar Trust (FXA) is a fund whose objective is to reflect the price of the Australian Dollar plus accrued interest. FXA is currently trading around $103.90 in a 52 week range of $96.57-$108.82. FXA is up 1.23% YTD, but is down 1.78% in the past 12 months.
FXA is heavily linked to FXI, China, and GLD, Gold. It looks as if FXA might have turned to the upside as it currently is trading above the 50 DMA, 103.50 and the 200 DMA at 102.50. I want to be bullish to neutral in the Australian dollar, so I can use options to place a trade a trade that will make money if the underlying is flat, goes higher or goes down by less than 2%. Australia exports 6% of their exports to China and I think a turn-around is in place for both countries.
My Trade:
Trade: Selling the FXA Dec 102-101 Bull Put Spread for $.25
Risk: $25 per 1 lot
Reward: $75 per 1 lot
Breakeven: $101.75