FXE Signal - November 20, 2012

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By: Andrew Keene

Today we have a trade in the CurrencyShares Euro Trust (FXE). FXE is an exchange traded fund that mimics the price of the Euro. FXE is currently trading around $127.15 in a 52 week range of $119.74-$134.89. FXE has seen a decline of 1.37% YTD and 5.54% in the past 12 months. This trade comes in the wake of Moody’s downgrading France from its AAA credit rating. This trade sets up for profitability in a flat to bearish Euro market.

My Trade:
Trade: Selling the FXE Jan 127-128 Call Spread for $0.50
Risk: $50 per 1 lot
Reward: $50 per 1 lot
Breakeven: $127.50
Notes: This trade sets up for profitability in a flat to bearish Euro market. FXE could even rally as long as it does not go through the $127.50 breakeven.

Andrew Keene spent 10 years as an independent equity options trader on the Chicago Board of Options Exchange, during which he spent the majority of his time as a market-maker for over 125 stocks. Andrew currently trades futures, currencies and commodities. When he's not trading, Andrew appears on top business television shows including CNBC's Squawk on the Street, Street Smart on Bloomberg TV and First Business, a show that is syndicated across the United States. Andrew graduated from the University of Illinois with a degree in Finance with a concentration in Accountancy.