This view represents, in our opinion, the most realistic movement of the German mark.  In order to hedge our risk away, we bought 400 at-the-money put contracts in order to create a synthetic long call. This results in an unlimited upside with a maximum loss of $310,000 resulting in a 1.1% loss on sales revenue.  We feel that this move is preferable to selling off futures contracts, as we do not limit our upside profit while at the same time we create a floor for our losses.  

 Note: Maximum loss within 1.28 standard deviations calculated before price of options and transaction costs.  

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