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Friday, August 10, 2012

This is what I called free money around the corner

I have lost track how many times I have talked down Euro in the past 2 years. I have repeatedly said Euro for me  is a dead fiat currency and it won't survive in its current format within 5 years. I have even said shorting Euro is the easiest money you can make as it is free money lying around the corner and the only thing you need to do is go there to pick it up (see here). I certainly put money where my mouth is. In a July 2011 blog, I talked about a methodology how to be more efficiently short Euro by selling EUO put options. Here is the status of this position I'm holding:
 EUO Jan 19 '13
$17 Put
                  0.05    -50  
$2.10   $10,196.57   96.62%   -$250.00  

I sold 50 contracts of EUO Jan 2013 put options for $2.10 in May last year, i.e. the target total profit is $10,500.00 by Jan 2013. But my account has shown that I have already almost reached the target; if I close the position today, my profit would be $10,196. This is over 4 months ahead of the schedule! Why? Because the Euro has declined so much in the past half a year or so. That's what I called free money with shorting Euro.

Of course, I know Euro won't disappear overnight and ECB and all the countries involved will try their best to prolong its life. There is still a chance that Euro will bounce back. I hope it will as this will give me another good opportunity to pick up more free money.         

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