How can I bet on the eventual collapse of euro ?

zz

Perhaps a time to buy then?? :cheesy:

secondary said:

Hello,

I obviously don't want to sound ridiculous but it looks like a good trade for a tiny tiny portion of my portfolio to hold... as an insurance mainly.

Some kind of out of money option or a warrant ? (I have a rudimentary understanding of these instruments btw)or what about william hill ??

Thanks.

Click to expand...

zz

zz

I'm sure someone with a much greater knowledge than me will be able to answer your question, but I don't think their trying to ridicule you mate, toughen up.

I think many people find the idea of the end of the Euro ridiculous, also I think a lot of people like to fade the consensus view (which may or may not be that the Euro is doomed) but as we know- for the really big moves to happen the consensus will have to be with you for some time.

You need to keep an open mind here. What if the PIGS are expelled from the eurozone, surely then euro shoots up in value. Really, anything can happen.

But check out CME options through a broker like Interactive, the spreads are very tight there. You could buy a 6mth low delta option - if EUR/USD goes through the floor, you'll make out quite nicely, with limited downside.

in short the best you can probably do is options as meanreversion says although depending on your time frame you'll have to pay a big premium to get it on. but otherwise you have just futures, or indeed the spread betting/cfd approach

It's all about the Benjamins

er...just an idea but how's about converting all your currency into other currencies? Right now the 'jibe' is done some serious stuff... The Euro is not finished, so what Greece is bankrupt, chuck in Ireland, Spain and Portugal and it's still not as *big* as California being bust...but we don't get that story in the M.Media do we? Neither do we get the fact that the acceleration of bank collapses in the US of A is greater since the turn on the year than in 2008-2009...What you're witnessing is (currency) economic warfare and as usual its all about the Benjamins.

The Euro has been as low as 0.85 v the Dollar, the *idea* initially is that it would rank equally with the dollar, ask yourself, do the great and good that oil the wheels of power in the US want a strong Euro when the dollar is the real basket case of currencies out there? Has it really collapsed given it's at 124? The benefits of the Euro and the free movement of; goods, services and people across so many borders are a marvel of monetary union, don't get blinded by the false gods of monetarist doctrine and UK isolation and ignore the massive benefits currency intergration has brought to so many. It was inevitable it would go through growing pains, it's here to stay...

I wouldn't rule out the end of the Eur myself - trouble is lets say you were to buy a PUT option - and the Eur falls apart - what will happen when you go to exercise that option ? - you would have the right to sell something that doesn't exist anymore!.. it would be complete mayhem! - mean reversion makes the best point here i think - if weak members left the Eur it could strengthen alot - probably more likely the PIIGS would leave than the whole thing falls apart - probably worth going down the bookies and placing an old fashioned bet if they will make you a price!

Don't fixate only on the Euro, some of the moves in commodities this year put FX to shame. Check out natural gas, copper and soybeans. EUR/USD is extremely unlikely to totally collapse, there'll be co-ordinated intervention to prevent that.

meanreversion said:

Don't fixate only on the Euro, some of the moves in commodities this year put FX to shame. Check out natural gas, copper and soybeans. EUR/USD is extremely unlikely to totally collapse, there'll be co-ordinated intervention to prevent that.

Click to expand...

And indeed there already has been. Whether it will be successful or not, well.

As ever, the guns, gold, and canned-food hoarders at ZH have a view:

http://www.zerohedge.com/article/central-bank-intervention-now-self-defeating


However, I think even less extreme commentators are admitting the possibility of at least a partial collapse of the Euro, or rather its replacement with a Mark II Euro, just for the prosperous countries. Hell, even the Scandinavians might join it if that were to happen. I'm not sure if the UK would ever qualify. We are prosperous but also profligate.


As things are, I don't think parity at some point is out of the question, but even that wouldn't exactly be the end of the (Euro) world, as has been pointed out.

The politicians, as always, place power, ego and hubris in front of everything else. Sarkozy is a small man, you have to remember, so the last thing he wants is a "weak" currency to go with his diminished stature. He wants a BIG, TALL, STRONG currency. BUT, the German export machine is in overdrive and will continue to thrive with a weak currency.

When the euro was 0.85 it was very oversold and the intervention then was effective. I don't think 1.25 is "oversold".. if it drifts to parity over the next few months, is that really a big problem for the real world?

(EUR/GBP still looks bloody high to me, if that came off 10 pct it wouldn't be shocking)

If you can trade forex in your broker account, just sell off some Euros as BlackSwan suggested. The margin in my broker account wouldn't be so much. I think it'd be cheaper than options, although if you can tell me whether you'd pay interest on it or not, I'd be all ears.