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Options Action: Playing Weak Dollar

Wednesday, 29 Sep 2010 | 6:20 PM ET

With the recent decline of the US Dollar Index , what is the right strategy to profit off of the sinking greenback?

For Wednesday's "Options Action," Mike Khouw of Cantor Fitzgerald explains how to use options to not only make a bearish bet on the dollar, but a bullish one too. Khouw suggests using the PowerShares DB US Dollar Index Bullish exchange-traded fund because it allows you to make that bet while limiting risk. He chose to illustrate how a bearish bet might work—see below.

**MIKE'S UUP TRADE**
Buy the Jan. 20 put at .23 cents

Watch the video to learn more about this trade.

Options Action
Playing the weak dollar, with Mike Khouw, Cantor Fitzgerald.

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Trader disclosure: On Sept. 29, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Terranova Owns (APA), (AAPL), (ARUN), (BMO), (C), (IBM), (HES), (JOYG), (XBI), (FTO), (OXY), (ORCL), (PEP), (POT), (RSH), (SU), (RIG), (UPL), (VRTS); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST)

For Joe Terranova
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners own more than 1% of (ABAX)
Virtus Investment Partners own more than 1% of (ALK)
Virtus Investment Partners own more than 1% of (AMKR)
Virtus Investment Partners own more than 1% of (CASS)
Virtus Investment Partners own more than 1% of (CSVI)
Virtus Investment Partners own more than 1% of (IGE)
Virtus Investment Partners own more than 1% of (LDR)
Virtus Investment Partners own more than 1% of (LPHI)
Virtus Investment Partners own more than 1% of (MGRC)
Virtus Investment Partners own more than 1% of (NRCI)
Virtus Investment Partners own more than 1% of (DBV)
Virtus Investment Partners own more than 1% of (XLB)
Virtus Investment Partners own more than 1% of (XLP)
Virtus Investment Partners own more than 1% of (XLY)
Virtus Investment Partners own more than 1% of (XLF)
Virtus Investment Partners own more than 1% of (XLI)
Virtus Investment Partners own more than 1% of (XLU)
Virtus Investment Partners own more than 1% of (SUBK)
Virtus Investment Partners own more than 1% of (WDFC)
Virtus Investment Partners own more than 1% of (YDNT)
Virtus Investment Partners own more than 1% of (DLUEY)
Virtus Investment Partners own more than 1% of (DRYS)

For Patty Edwards
Edwards owns (BAC) for clients
Edwards owns (JPM) for clients
Edwards owns (HPQ) for clients
Edwards owns (WMT) for clients
Edwards owns (FXI) for clients
Edwards owns (AMZN) for clients
Edwards owns (SYT) for clients
Edwards owns (VXX) for clients
Edwards owns (SPY) for clients
Edwards owns (QQQQ) for clients

For Brian Kelly
Accounts managed by Kanundrum Capital own (GLD)
Accounts managed by Kanundrum Capital own (GDXJ)
Accounts managed by Kanundrum Capital own (SLV)
Accounts managed by Kanundrum Capital own (C)
Accounts managed by Kanundrum Capital owns U.S. Dollars
Accounts managed by Kanundrum Capital own (TIP)
Accounts managed by Kanundrum Capital own (ATI)
Accounts managed by Kanundrum Capital own (TIE)
Accounts managed by Kanundrum Capital own (RAX)
Accounts managed by Kanundrum Capital own Swiss Franc
Accounts managed by Kanundrum Capital are short (XLF)
Accounts managed by Kanundrum Capital are short (IAI)
Accounts managed by Kanundrum Capital are short (STT)
Accounts managed by Kanundrum Capital are short (FDX)
Accounts managed by Kanundrum Capital are short the Mexican Peso
Accounts managed by Kanundrum Capital are short the U.K. Pound

For Steve Grasso:
Stuart Frankel & Co and it’s partners own (AMGN)
Stuart Frankel & Co and it’s partners own (BAX)
Stuart Frankel & Co and it’s partners own (COG)
Stuart Frankel & Co and it’s partners own (CUBA)
Stuart Frankel & Co and it’s partners own (GERN)
Stuart Frankel & Co and it’s partners own (HPQ)
Stuart Frankel & Co and it’s partners own (HSPO)
Stuart Frankel & Co and it’s partners own (MERC)
Stuart Frankel & Co and it’s partners own (NWS.A)
Stuart Frankel & Co and it’s partners own (NYX)
Stuart Frankel & Co and it’s partners own (PDE)
Stuart Frankel & Co and it’s partners own (PFE)
Stuart Frankel & Co and it’s partners own (PRST)
Stuart Frankel & Co and it’s partners own (RDC)
Stuart Frankel & Co and it’s partners own (TLM)
Stuart Frankel & Co and it’s partners own (XRX)
Stuart Frankel & Co and it’s partners own (SDS)
Stuart Frankel & Co and it’s partners are short (QQQQ)

For Kevin Pleines
Birinyi owns (AMZN)

For Doug Kass
***No Disclosures***

For Joe LaVorgna
***No Disclosures***

For Mike Khouw
***No Disclosures***

  Price   Change %Change
USD INDEX
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UUP
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