Market: October Dollar Index (DXZ7)
Tick Value: 1 point = $10
Trade Description: Long Call
Option Expiration Date: 11/09/07
Max Risk: approximately $250
Max Profit Potential: Target is 200% of the risk.

Buy an October 2007 Dollar Index 82 call for approximately 25 points ($250) to open a position.



The Dollar has been trying to bounce off of 26 year lows and many of our indicators have confirmed that this bounce should continue into the fall of this year. We are buying a near the money call with roughly 100 day before expiration. Giving us ample time for the market to stage the expected bounce. I wrote an article for the August issue of PitNews Magazine that goes into detail about why we feel the dollar is going to stage a solid bounce. Bottom line is we feel that this is both a low cost and low risk trade with plenty of time and potential to mature into a great trade.

Profit Goal
Or profit goal is to catch a move above 82.50 on the Dec. Futures contract. Break even point is 82.25 assuming a 25 point fill. 100% gross profit would be realized at expiration if the market is at 82.50.

Risk Analysis
Max risk, before commissions and fees, and assuming the above mentioned fill would be $250. The full premium paid for the option is lost at expiration if the market expires below 82.00.

Derek Frey is Head Trader at Odom & Frey Futures & Options.

Risk Disclaimer
Past performance is not indicative of future results. Trading futures and options is not suitable for everyone. There is a substantial risk of loss in trading futures and options.