Trading Greece

How to make money on Greek debt crises.

With talks of a deal with Europe, the Greek government is set to avoid default on its debt. That is taken as positive news to by the markerts as seen by the the 500 point move in the German Dax and also moves in all other European markerts. What that means is that, should the deal be finalised this week, and Greece receiving more funds from the EU, the Dax is likely to trade above 12 000 points within a few days or two weeks.hould the deal not go through, then the Dax will retrace back below 11 000.

WHY GREECE MATTERS.
Investors fear a Greek exit will make any debt guarantee by the EU useless. Previuosly, investors were able to buy Greek debt at high prices with the hope that the EU would chip in should Greece not be able to service its debt. Now that Europe is playing hide and seek with Athens, investors have many reosons to worry and that has led to a massive sell off of Greek government paper and caused bank runs in Greece. Stock markerts have erased gains since most companies trading on the stock exchanges are one way or the other exposed to Greece. A deal will then be good for EU banks and their affiliated business partners.

Though Greece has a very small economy and almost insignificant in the bigger scheme of things, it is the reputation of the European Union that is being put to test. Is the EU a strong economic union that can save member states in trouble or is the EU just a big helpless elephant? If the Greek issue is not solved, no investor will have full faith in the EU.