How to short money markets

H

hxcjf

I'm trying to figure out how to profit from the Greece default. I'm pretty sure American money markets are heavy holders of European debt and I'd like to buy out of the money puts against a collapse in interbank lending...any ideas?
 
Why not just short european equity? Even if you are right, money market funds will suffer relatively low level of losses relative to pure equities.

Quote from hxcjf:

I'm trying to figure out how to profit from the Greece default. I'm pretty sure American money markets are heavy holders of European debt and I'd like to buy out of the money puts against a collapse in interbank lending...any ideas?
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Short the front Eurodollar (GE) contract is the most obvious way to do what you want to do... However, and this may come as no surprise to you, quite a bit of this blowup is priced in already. As DMTB says, if you wanna be short EUR banks on the back of Greek writedown, why not just be short smth like the SX7E.
 
all great suggestions so far esp from above poster. if greece doesn't default what happens? that means germany bailed them out yet again. time to short bunds/long cds.
 
Quote from FrankSlaughtery:
all great suggestions so far esp from above poster. if greece doesn't default what happens? that means germany bailed them out yet again. time to short bunds/long cds.
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Yep, there's a bit of that being priced, but it's hard to price bunds, given the extreme outcomes.
 
Quote from Martinghoul:
Short the front Eurodollar (GE) contract is the most obvious way to do what you want to do... However, and this may come as no surprise to you, quite a bit of this blowup is priced in already. As DMTB says, if you wanna be short EUR banks on the back of Greek writedown, why not just be short smth like the SX7E.
More...
I just realized that DMTB's suggestion (seconded by me) isn't gonna fly. The only index you can short these days is the DAX, which is probably not what you'd wanna do. Everything else would fall under the short-selling ban, if I am not mistaken.
 
It varies by broker. Some are allowing you to take new short positions the EuroSTOXX and the MIB and the CAC, others aren't.

I am told that IB and MFG are in the former camp, Newedge the latter. Call your broker and find out the details, there.
 
Quote from MGJ:
It varies by broker. Some are allowing you to take new short positions the EuroSTOXX and the MIB and the CAC, others aren't.

I am told that IB and MFG are in the former camp, Newedge the latter. Call your broker and find out the details, there.
More...
Indeed, 100% spot on... This is a very sound idea.
 
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