PowerShares Bullish Dollar Fund (UUP) is up 8 cents to $21.89 as the euro slips against the dollar for the third consecutive day. While UUP tracks the dollar against a basket of other currencies, it is heavily weighted towards the EUR/USD pair and the euro is weakening again amid ongoing concerns about problems in the Eurozone’s deeply indebted countries like Greece and Spain. Early options trades on UUP today include a 1400-lot of Oct 22 calls for a nickel per contract. 2,971 have traded. Open interest in the contract is a staggering 373,921 and the 8th largest among listed options today. Much of that OI dates back to Sep 14 when more than 380K Oct 22 calls traded on UUP at a VWAP of 11.5 cents (see 9/14). Shares are up 18 cents since that time, but the move hasn’t been sufficient enough to offset the negative impact of time decay. In addition, implied volitility in the UUP Oct 22 calls is falling to just 6.5 percent from about 9 percent a month ago, which is one reason the contract now trades for only a nickel. There are now just 10 days for the trade to play out.
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