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This trade was originally suggested on 16- March 2018 FxVol Weekly. Here is a link to the original trade idea
Have bought the full hedge at 1.5500 there are now two options going forward
1. Buy the EUR face amount of the option at 1.5500
2. Sell the 1.6000 CAD Call EUR put
3. Unwind the hedge
Or,
1. Buy the EUR face amount of the option at 1.5500
2. Roll the hedge forward 1-month and pay away the forward points (approx. 25tics)
3. Leave a standing order to sell the EUR face amount of the option at 1.6000
4. If 3 is done sell the option.
Our preference would be to sell the option and unwid the hedge. The current spot is 1.5524. the Option can be sold for 3.20% of EUR vs. our initial cost of 1.09% producing a gross return of
293% of Capital. + the small gain of 24 ticks on the unwind of the hedge.
Just as matter of completeness we also called the move up in CADJPY correctly from the lows, but did not write it up as a Trade suggestion.
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