“Tony Zhang Sees Weakness Under SPX & NDX Surface, Offers UUP & APO Options Trades”
UUP has potential for further upside; strategy is to buy calls for leveraged exposure with defined risk.
Therefore, I am considering using the UUP ETF , which tracks the US Dollar Index, and I am simply looking to buy some call contracts to pursue further upside exposure in this particular stock with limited risk.
I will choose a November expiry date, which gives me about two months of exposure, and I am looking to buy a "Cole" contract at $28, which is a contract that is actually close to being "in the money" at about one dollar.
Earlier today, you could have paid slightly less than a dollar for that contract. Therefore, this " Cole" contract has a breakeven price very close to the current fund price, and this gives me upside exposure for the next two months with a risk of less than $1 per share, or about $100 per contract.