10k bet on Greek default

mk2012's picture
Rank: Monkey | 62

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?

Comments (24)

Jul 12, 2011

Wait 6 months and use that 10k to buy a Greek island.

Jul 12, 2011
Edmundo Braverman:

Wait 6 months and use that 10k to buy a Greek island.

lol! True but I wouldn't want to live there when they go bust...

I like pickles...

Jul 12, 2011

ok...thanks for that great contribution, lol

any other thoughts guys? How would you go about it? Short the Euro?

I like pickles...

Jul 12, 2011

http://www.intrade.com/v4/markets/contract/?contra...
A bit longer timescale than you were looking for, but it's not a terrible proxy.

Jul 12, 2011
Umadbro:

http://www.intrade.com/v4/markets/contract/?contra...
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...

I like pickles...

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Jul 12, 2011

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.

Jul 12, 2011
manbearpig:

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.

^ ja

Jul 12, 2011
UFOinsider:
manbearpig:

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.

^ ja

well politicians who know s*^% about finance would

Jul 12, 2011
manbearpig:

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.

history repeats itself, especially with the muppets running the EMU

Jul 12, 2011

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.

I like pickles...

Jul 12, 2011

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.

Jul 12, 2011

"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?

Jul 12, 2011
yankeez6:

"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...

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.

And buy CDS on them? Can I do that as a non-institutional?

I like pickles...

Jul 12, 2011

Black, 100% return in under 2 min

Jul 12, 2011

That last comment of mine was retarded, I could just short the stock which is probably what you meant...

I like pickles...

Jul 12, 2011
mk2012:

That last comment of mine was retarded, I could just short the stock which is probably what you meant...

Well if you have access to CDS markets, then yeah you could also buy CDS on corporates (not sure how much $ you need to buy a CDS contract)
I originally meant short the position since that's probably more accessible to you than CDS.

Jul 12, 2011

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.

I have to return some video tapes.

Jul 12, 2011

Also if you're looking for eurozone short positions, keep an eye on Italy.

I have to return some video tapes.

Jul 12, 2011

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.

Jul 12, 2011

what if they kick Greece out of the euro?

TheKid1:

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.

Jul 12, 2011

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?

Jul 12, 2011

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.

Jul 12, 2011
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Jul 12, 2011