Range Accrual

In finance, you can make money on the value of an asset going up. Buy low, sell high. You can also make money when the value goes down. Set a short position, and cash in when the price falls.

Those are the obvious moneymaking options. But you don't do the obvious thing. You're more punk rock than that. You want an alternative. Luckily for you, there's range accrual, the punk-rock money-making method (well...punk rock in a Wall Street sense).

Instead of profiting when the value goes up or down, a range accrual pays off when it goes sideways. Not higher. Not lower. Just...holding in a range. A range accrual exists as a derivative product that pays off different underlying index stays within a predetermined range. It's often used with interest rates or with currency exchange.

So...you buy a range accrual that pays off if the dollar stays within a range of 1.10 to 1.20 versus the euro. If it jumps to 1.23, your bet fails. However, if it stays over 1.10 and under 1.20 until the expiration of the derivative contract, you cash in.