US Dollar ETF ($UUP) June 24 Puts At-The-Money

I've been writing about the US Dollar Index and $UUP (USD ETF) for a while now and so far no big blocks of UUP puts have hit the jack pot (1, 2). Actually there are 3,000 June 25 to 26 puts in-the-money but 5,744 are open at the 24 strike and $UUP closed at $24.07 today and 23.87 a few days ago. The combination of the Treasury massacre, tightening dollar funding spreads, equity rally, USD dilution and expected reflation (recovery) have GUTTED the US Dollar recently. The USD is also moving inversely with gold.

Back to the ETF. UUP is sitting right at the June 24 put strike which is support and coincides with $USDX $80 support. I'm not sure of the exact nature of the trade (calendar spread, hedging, naked shorting etc.) however if $UUP can break below $24 and head to $23 before June 19 less premium Fund X could net over 400k (3-6 fold) if they were long ((5000x100=500,000*$24 - " "*$23)-100k or 50k premium).


June $UUP Puts (Yahoo Finance)

UUP Chart (Stockcharts.com)

Lets see if CBs support the US Dollar here and cap Gold's $1,000 break out. Also watch out for a USD safe haven bid. Things are heating up in Pakistan/North Korea.

Articles:
FOREX-Dollar dips towards 5-mth low on US debt worries (Reuters)
Geithner to Urge China to Boost Demand, Official Says (Bloomberg)
China's Senior Official Expects USD to Maintain Its Reserve-Currency Status (DailyFx)
ECB's Constancio sees no collapse of U.S. dollar (Reuters)
Devaluation of U.S. dollar global trend: Brazilian official (Xinhuanet)
Why Beijing Wants a Strong Dollar (WSJ/Opinion)

I'll leave you with funny words from rapper 'Devin the Dude' on his song "Almighty Dollar" about the declining value of the USD and commodity inflation of 2007 (Explicit). Note this was made before the $Trillion stimulus package.