1. Always try to initiate positions in the Australian dollar 90 to 100 days before expiration. You get better premiums for risk returns. Major quarterly expirations are March, June, September and December. Check the options expiration calendar for currencies at CME group web site. Initiate the options as per the instructions. You can initiate the options if the following criteria are met.
2. Check the latest price of the Australian dollar futures contract for the expiration date. Example if the September 2014 Australian dollar is trading at 9188 on May 28th 2014 consider the strike price of 9200 as your base strike price.
3. Strike prices are usually at 50 point intervals apart (0.0050= 50 points). Most of the option strike matrixes give out option premiums calculated in dollar terms.
4. Check the value of the option premium prices. You should get at least 200 points more than the intrinsic value of the initiated strike prices.
5. Check for the value of the premium prices. You should get at least 200 points more in value than the strike price difference. Example if you are selling September 2014 Australian dollar 9000 call and 9400 put you should collect more than 600 points in premium ( in the money 400 points and out of the money 200 points) that is 400 x 10.00 = $4000 in the money and 200 X 10.00 = $2000 out of the money.
6. Farther you are away in strike prices from current futures contract price is better. Sometimes it may be only 150 points or even 100 points away on each side (means call and put). That’s ok.
7. When the volatility is low the option premiums are low. Then look for the different strike prices that fit the criteria. One side can be 150 points and other side can be 200 points.
8. Here is the grid for option matrix
   
   

   Calls       Strike prices       Puts

   The two calls option premium sold at A+6 should cover purchase of one call at A+4

   Sell two calls at A+6 or       A+6

   higher       A+5

   Buy one call at A+4       A+4       +4 sell one put

   A+3       +3

   A+2       +2

   A+1       +1

   Base strike price (A)

   Futures contract price/month
   -1
   -2
   -3
   -4 sell one call       A-4 Buy one put at A-4 strike price
   -5
   A-6       Sell 2 puts at A-6 strike price or lower

   The two put option premium collected at A-6 should cover the purchase of a put at A-4. For the positions the commissions should not cost more than $50.00

9. Now at the edge of the options bracket you just sold and collected the premiums build a hedge with someone else’s money.
Now buy a put at the same strike price where you sold one call. Buy a call at the same strike price where you sold one put.
10. Before you place an order for number 10 instruction sell two puts at least two or more strike prices away from the strike price of one put to be purchased.
11. Make sure the premium collected by selling two puts is adequate or even more to purchase the put.
12. Same thing on call side. Again before you buy the call sell two calls at least two or more strike prices away from the purchased call strike. Make sure the premiums collected are adequate to buy the call.
13. If for any reason (usually low volatility) the premiums are not covered may be 5 or 10 points its ok. You may adjust the strike prices to cover it.

As of closing of August 1st 2014 the September 2014 Australian dollar was trading at 9285. The option pricing on this day reveals I have a gain of 155 points equal to 155 X 10 = $1550. We have margin of 4000. This is a gain of 1550/4000 = 0.3875 X 100 = 38.75%. At this point I am closing my positions and initiate new positions for December 2014.

The Australian dollar is at 9285 and not yet reached 8900 or 9400. We gained a 155 points out of possible gain of 221 points. At this point it is better to restart new positions with a better risk profile that is initiate options for next quarter following the criteria laid out.