Any ideas to profit from the Bailout for traders?

L

lynx2004

Whether we personally agree with the bailout or not, it doesn't matter for this thread. (There are many other threads which discuss "how to" solutions to the so called crisis and pros/cons etc in the Economics forum. )

Let's try to keep this thread to trading ideas (markets, positions based on what the Gov / FED / Treasury does / expected to do / pass / doesn't pass Bailout / Rescue Plan etc.

I can see a tangential trade to:

Trade oil from the long side (but this is a too removed derivative)

Logic suggests short USD but I don't think it'll work right away as Europe / Asia seem slowing faster now.

What about interest rates / Spreads?

Any other ideas?

FED has been creating bubbles for decades trying to get out of one problem to fall into the next. What will be the NEXT BUBBLE to be created?
 
If the bailout comes:

Short any U.S. Treasuries since they must issue new debt to pay for these deals.

Short the TUD and/or the TED since U.S. rates will spike much faster than LIBOR rates.

I'm an interest rate guy, so that's all my ideas.
 
If you short the USD you don't need to buy another paper currency. You can use the USD proceeds to buy gold.

Quote from lynx2004:



Logic suggests short USD but I don't think it'll work right away as Europe / Asia seem slowing faster now.
More...
 
If warrents are a large part of the deal for banks. Get short after the jump in financials. Oh crap we can not do that. Go short es and go long ETF's of the other major sectors to create a synthetic short of S&P financials. Maybe also buy the financials that do not have alot of crap on their balance sheets Wells fargo and US bank corp too create a synthetic short of the firms who will be the most dilutied.
 
Quote from m22au:

If you short the USD you don't need to buy another paper currency. You can use the USD proceeds to buy gold.
More...

Do you mean just go long Gold?

Might work longer term but immediately after Bailout Gold probably sell off as the panic recedes a bit.
 
wouldn't JPM, C, BAC be the likely winners with decreased competition, government support, fresh demand in the mortgage market and cleaner balance sheets?
 
On Wednesday of last week in the Chit Chat forum i started two threads called buy major indexes and stocks and another along the same lines. The only fundamental trading I do is when there is very big news coming. It was without a doubt simple to know that there was a bailout coming because of the past bailouts. The market is in survival mode right now mainly because of it's childish emotion but any news that increases the thought of survival will surely make large percentage gains. I sold some of my position's Friday because of the bailout but i still made around 3%. When the market opens in a couple hours it will be up around 3-6% maybe even more. I called this huge opportunity on ET days before it happened but everyone was so stunned about the huge movements of the market that they couldn't stomach their money in the market.

This was a huge opportunity and i can't believe most everyone missed it.
 
Quote from NeoRio1:

On Wednesday of last week in the Chit Chat forum i started two threads called buy major indexes and stocks and another along the same lines. The only fundamental trading I do is when there is very big news coming. It was without a doubt simple to know that there was a bailout coming because of the past bailouts. The market is in survival mode right now mainly because of it's childish emotion but any news that increases the thought of survival will surely make large percentage gains. I sold some of my position's Friday because of the bailout but i still made around 3%. When the market opens in a couple hours it will be up around 3-6% maybe even more. I called this huge opportunity on ET days before it happened but everyone was so stunned about the huge movements of the market that they couldn't stomach their money in the market.

This was a huge opportunity and i can't believe most everyone missed it.
More...


wow you are just the man, and most of us, well, we're just some regular old hillbillies trying to make a nickle or two from this here market when luck affords it. where can we send for your autograph?

spend less time admiring yourself, bro, and more being silent.
 
When Govts try to prop up markets, there usually are opportunities to profit. They most certainly will overpay for these MBS (I don't see anyone else lining up to buy these, right?) but how can someone profit from this action? I can't think of a direct trade except the consequential trades mentioned earlier by others. My thinking cap needs help!!!

(So are we done with bubbles? Deflation in the horizon?)
 
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