By: Andrew Keene
FXC seeks to reflect the price in U.S. dollars of the Canadian dollar. The shares are intended to provide institutional and retail investors with a simple, cost-effective means of gaining investment benefits similar to those of holding Canadian dollars.
This year’s winter in the U.S. is expected to be mild, which has been the price of oil down. FXC is highly correlated with oil because Canada’s currency is as well.
My trade is to sell the Dec FXC 100 – 101 Call Spread for $0.40
My risk: $60 per one lot
My reward: $40 per one lot
Break even: $100.40
Why I like this trade: Trading this option strategy is advantageous when compared to the currency pair or futures on the currency because I make money if the stock goes down, stays flat, or even goes up less than 0.4%.