A Different Way To Play The Euro

• The Euro has had a rough year, having lost almost 10 percent versus the U.S. Dollar.
• However, the currency gained more than 2.5 percent since the beginning of the month.
• Where is it going next? And, is there a way to play it without actually acquiring the currency?

After years of being worth substantially more than the U.S. Dollar (in 2008, one Euro was worth more than 1.5 U.S. Dollars), the Euro approached parity with the North American currency in 2015. A Euro is now worth less than 1.10 U.S. Dollars.

The European currency fell strongly in the first couple of months of the year, then recuperated slightly, and then tumbled again in late October and over November. However, since the beginning of December, the currency’s value rose by roughly 2.5 percent.

So, a couple of questions arise. First off, where will the Euro go next? Will it go on to recuperate, or will it continue in its path to parity with the U.S. Dollar? And, are there ways to benefit from the currency’s moves – other than acquiring the actual currency?

Related Link: The Fed Raises Rates: How You Could've Played It

Binary options provide an interesting alternative.

What Are Binary Options?

Trading via binary options is just that: Playing a binary event. “Binary options are limited risk contracts based on a simple yes/no market proposition like will the markets go up by the end of the trading week,” binary options trading site Nadex explained.

Trading Currency Pairs Via Binaries

Nadex offers short term binary options, “a new way to trade all major currency pairs, offering continuous opportunities in flat or volatile markets, and protection against being stopped out by temporary market spikes.”

A classic Forex Binary Option contract may be: EUR/USD (Wed) > 1.10 (2PM)

For traders thinking the EUR/USD rate will stand above 1.10 by 2pm Wednesday, buying this Binary Option could be the way to go.

For those thinking the EUR/USD rate will stand below 1.10 by 2pm Wednesday, selling these contracts might be best.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.