EFTA Document EFTA01436319

Subject: [/] A bad ni ht for An ela Merkel: Tactical Trade Idea From: Martin Zeman Date: Mon, 20 Nov 2017 10:22:20 -0500 To: "Paul Barrett (S" ‹ > Cc: Stewart Oldfield Morning Paul, By the time I finished pricing this below, spot ran lower 20 pips. Still, think this might make sense in some variation or other.... On the back of the breakdown in coalition negotiations in Germany about which I wrote earlier this morning, we put together a few ideas on how to play EURUSD lower over the coming weeks. Our base case is that negotiations will continue and some sort of coalition will emerge. But volatility in EURUSD will remain; should there be a call for snap elections in Germany (stranger things have happened over the last 18 months — think back to Brexit and the US elections), EURUSD will most likely sell off substantially. EURUSD Spot ref = 1.1770 Buy 2 month EURUSD 1.1350 One Touch for 14.25% This trade provides for 7x payout (meaning for a EUR 100,000 payout anytime EURUSD trades at 1.1350 over the next 2 months, you only have to spend EUR 14,250 today). In case of a call for snap elections in Germany, EURUSD would probably have a sharp move lower. The risk on this trade is the loss of upfront premium paid (14.25% of payout notional amount) Buy a 2 month 1.1350 Digital Put (payout EUR 100k) versus Selling 1.2300 Digital Call (payout EUR 100k) -> Zero Cost This trade is zero cost The buyer of the digital put gets paid EUR 100k if at expiry EURUSD is below 1.1350 and will have to pay EUR 100k if at expiry EURUSD is EFTA01436319 above 1.2300 If at expiry EURUSD is somewhere between 1.1350 and 1.2300, the options expiry worthless The main risk to these trades would be continued strength in date out of Europe, which would have the potential of reversing the very dovish ECB stance. fcid:image006.png@OlD361E6.C95576701 Please see a note from our FX Daily Strategist Robin Winkler: http://pull.db-gmresearch.com/cgi-bin/pull/DocPu11/710-D7E8/20361321/- DB FXDaily_2017-11-20 45c07d52-1142-456b-a94a-4e777cbab682 604.pdf {cid:image001.gif@OlD259D5.3E2DFOF0} Martin Zeman Director I Key Client Partners Deutsche Bank Wealth Management DB Securities Inc 345 Park Avenue, 10154-0004 New York, NY, USA Tel. +1(212) 250-0432 Mobile Email KCP products and services are intended and available only for persons who are sophisticated institutional investors within the meaning of the FINRA Rule 4512(C)(3), and who are capable of evaluating the strategies, characteristics and investment risks of, and exercising independent judgment in evaluating, the ideas and products discussed herein. Trades and transactions are subject to relevant internal approvals of DBSI or its EFTA01436320 affiliates prior to execution, and the execution of any transaction or idea discussed herein is conditional on your becoming a client of Deutsche Bank. Key Client Partners (KCP) products, investment ideas and solutions and related matters discussed herein are provided for discussion purposes only, and strictly on a non-advisory basis. The KCP Americas desk does not provide investment advice. The information set forth herein is confidential and personal to you and is being presented for your information and for discussion purposes only. Any reproduction and/or redistribution thereof (in whole or in part) or disclosure of its content without our written consent is strictly forbidden. This communication does not create any legally binding obligation on the part of DBSI or any of its affiliates. 026580 112017 EFTA01436321