Sov CDS trading idea - need advice
 

Hi,
Very simply how would one trade the spread between two sov CDS rates so that you make money if the spread widens, regardless of whether one goes up or down. E.g.

country A 5yr CDS = 100
country B 5yr CDS = 100

so currently no spread. If go long A and short B, will make money if A goes up and B falls. But I also want tp profit if A goes down and B goes up.... so how would i do this? Would you put on a straddle to trade the vol of prices? any ideas... thanks

Re: Sov CDS trading idea - need advice
 

There's no mkt in options on sov CDS... There's no easy way to do what you're trying to achieve.

Generally, you should steer well clear of sov CDS, which is a sh1t product.

Re: Sov CDS trading idea - need advice
 

A CDS is a sort of proxy option anyway, rite? Low initial premium, big maximum upside.

Can retail punters trade these things? I've not heard of anyone doing this.

Re: Sov CDS trading idea - need advice
 

Well, not really... CDS is a linear product, normally. Obviously, like all other assets, the more ludicrously cheap they get, the more the payout starts to resemble that of an option. As to whether you can trade these as retail, I am pretty sure the answer is no.

Re: Sov CDS trading idea - need advice
 

no way you could trade as retail. you need brokerage with something like newedge or Goldman. last I heard you need $2mil capital to open an account with newedge and $10mil for goldman.

Re: Sov CDS trading idea - need advice
 

Hello guys,
i am posting my trading plan and i would really appreciate your comments and analysis of it , this works 70% of the time however it is missing something and I would like to make it perfect. with your help

Trading Plan
First I look out for patters of over bought or over sold conditions the example that i am going to give you is an overbought condition.
Second I wait for the stockastic crossover diversion into an overbought condition.
Thirdly I wait for the macd crossover going into a diversion, a histogram diversion or double head.
Fourthly if the moving average is going to cross over I wait until the crossover has finished then I set up my fibonacci, wait until the price breaks the resistance level then wait for a signal like a shooting star or a doji, then short and set my fibonacci again. i get out at 38.2% or if the market is very week at 50%. Obviously this works perfectly if you can short right at the top.
My question is does anyone know of an indicator which lets me know how high the price can go. I am not sure this type of indicator exists.
i would love to paste the chart but i dont know how to do it in link in pls contact me if you want, i will send and email to you with the charts attached
i hope that your trading plans are going well.
RICHARD

Re: - need advice
 

Re: Sov CDS trading idea - need advice
 

This is a joke right? I hope you're not being serious.

how about look for these setups (maybe less complicated) and go with them on the hope that other people will go with them as-well. Sell just before others sell, if it goes your way, Take profit very quickly, as soon as the momentum stops. If you sell and price sits around not doing anything (i.e. no one is jumping into the trade), then get out.

Thats a real, money making strategy right there.