JP DOKE, Inc. - Exporters Extraordinaire

Alternate Strategy #2
Deutsche Mark stable, High Volatility
Hedging Strategy: +400F +700P(itm) (Similar to Synthetic Long Straddle)
 
L or S (Long/Short)
L
L
.
F, C, or P
F
P
.
Forward/Strike Price
.5548
.5500
.
Option Price
0
.0091
.
Number of Contracts
400
700
Net
Total Premium
N/A
796
-796
 
 
In order to capitalize on the high volatility of this scenario, we created what approximates a synthetic long straddle to profit of price movements in either direction (The full synthetic long straddle's transaction costs caused the position to exceed the risk limit).  The most this position can lose is $524,000, resulting in a 1.9% loss on sales revenue.  This position is direction neutral.  Movements in any direction will yield a profit.
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