Wednesday, 9 January 2008

Downside options on the DAX

Germany has been holding up way too well, just a shade off its highs.

1 Year Chart of DAX

Europe isn't going to avoid the global slowdown, it's just trading with a delay to the US.

So I've just sold a 7500 March call at 517.6 in £10/point, so £5176 premium.
And bought a 7000 March put at 76.3 in £69/point, so £5265 premium.

Net cost £89. (I had intended it to be ~zero but got my sums wrong!)

At worst, I don't mind setting a short at 7500 anyway on the DAX, but hopefully any near-term falls will allow me to take some very good money out of this trade. Come on the 10% fall!


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