10k bet on Greek default
I have about 10k in disposable savings and a pretty strong view Greece will default within the next month. How would you guys go about (potentially) making as much money on a Greece default?
As far as I know CDS aren't available to non-institutional investors (besides being really expensive at this point), what other options do I have?
Wait 6 months and use that 10k to buy a Greek island.
ok...thanks for that great contribution, lol
any other thoughts guys? How would you go about it? Short the Euro?
http://www.intrade.com/v4/markets/contract/?contractId=745093
A bit longer timescale than you were looking for, but it's not a terrible proxy.
thx for this, very cool did not know it before! Unfortunately there are only 2 shares available that would limit my exposure to about $20...
Greece is not going to default...no one will let them. I think Lehman was a big enough lesson, and the chain reaction that caused won't be anything compared to this.
well politicians who know s*^% about finance would
history repeats itself, especially with the muppets running the EMU
I know that the two are often compared but I think its a completely different situation with a completely different background (highly political). I would also count a "soft restructuring" or a moratorium as a default, which might not be as bad as a full default.
Is restructuring considered a credit event that would trigger default? Why don't you find select companies that would be affected most by a default? NBG is an example, but it seems too risky at this point.
"Greece sold 1.625 billion euros of 182-day bills, the nation’s debt agency said. Investors bid for 2.88 times the securities offered, the Public Debt Management Agency said.The U.S. sells $32 billion of three-year notes today, the first of three offerings totaling $66 billion. "--today's bloomberg article
See how the t-bills sell today. I think you should buy the dollar and euro, since one is bound to benefit. Use that as a hedging strategy..but depending on how the US sells t-bills today..wouldn't the Fed buy all of them as part of QE2? Is there a way of seeing the breakdown of who purchases bonds?
If Greece defaults, don't you think it's going to be a huge blow to the Euro? EUR/CHF is already at 1.165 today... As far as I know, you can't see a breakdown of who purchases how much at these auctions...
And buy CDS on them? Can I do that as a non-institutional?Black, 100% return in under 2 min
That last comment of mine was retarded, I could just short the stock which is probably what you meant...
A default may not be allowed to happen a'la Lehman bros but some sort of debt rollover type tactics may be used. You could get short but I think this is catching it right it the valey and remember downside is theoretically unlimited.
Also if you're looking for eurozone short positions, keep an eye on Italy.
I remember someone mentioned earlier in another thread, that Greek defaulting would be better for them, since they wont owe any more, but their economy would be shit for atleast 20 years.
what if they kick Greece out of the euro?
And for all us non-institutional folks, the best way to profit from a Greece default may be purchasing stocks of US companies with lots of payables outstanding to the euro zone. Falling euro means less dollars out of the US customer's wallet. But, the european supplier probally has hedged against currecy risks, esp the euro dollar one..soo who can't afford a default besides Greece?
I wouldn't invest 10K right now, and especially not in Greece. I expect that it gets worse, especially now Portugal has been down rated and Italy is on its way and a next candidate in line would probably Belgium or so. I would wait one more month and than go short in Italian bonds and Italian financial institutions. There is more shitload on the way, believe me. Greece is just the top of the iceberg.
Buying CDS's would be the most convenient step to take. Another idea would be is to find a country that has a negative (auto)correlation regarding government bonds with those European countries and go long/short. If those options are not available to you, just wait a couple of months and go long on financials since those firms are damaged more heavily during these events than others.
The government was, during the end of the credit crisis, afraid that, when the next crises arises, the financial insititutions could not be helped again but could also not fail. In this 'Euro crisis' it isn't the financial institutions that cannot be helped and cannot let them go default, it is the countries that's worsening.
Laborum iste voluptatem fugit natus dolor. Quisquam molestiae maiores non vel porro ipsa rem quos. Ad fugiat tempora sunt molestias.
Reiciendis reprehenderit dolorem ducimus unde corporis et. Recusandae ut dolorem maxime mollitia numquam error.
Dignissimos ipsum saepe libero et quas veritatis voluptates. Et ea sed id accusantium commodi rerum. Est non hic ut sit. Vel eius mollitia deleniti.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Quo impedit non minima consequatur vel. Molestiae officia quae vel consequuntur.
Aspernatur nisi ea laboriosam culpa voluptas. Voluptatibus eveniet maxime amet ut. Hic iure ut deleniti porro ea. Nesciunt repudiandae natus soluta dolorum a aliquam. Distinctio libero libero et sunt aut.
Ut aspernatur laborum aut cum voluptate consequatur architecto. Natus magnam ipsam itaque ipsa. Dolor beatae dicta quasi totam qui et.