As the euro plummets, options traders are trying to find a way to cash in.
In a massive trade just before Tuesday's close, one trader bought 200,000 January 102/94 put spreads on the Guggenheim euro currency ETF (FXE) for $1.96 per share. Since each options contract controls 100 shares, this is a $39 million bet that the euro goes much lower over the course of the year.
Maximum profits of $121 million come with the FXE at 94 by January 2016—which roughly corresponds to the euro trading at 0.94 to the dollar, well below the widely watched parity level.
The euro has been absolutely crushed in recent days, falling to 12-year lows in session after session as the European Central Bank begins its long-awaited quantitative easing program. On Wednesday morning, it fell to 1.0559.