subject: Fx Markets, Greek Debt And Selling The Euro [print this page] The level of Greeces debt has been well publicised as has the fact that the Greek Government is having to borrow at extremely prohibitive rates. As is the norm in these cases the speculators are being blamed for making the situation worse.
I always find this strange, if the speculators are wrong they will lose, if they are right, then they will win. As Simon Denham of Capital Spreads recently pointed out, Our spread betting clients have been shorting the Euro and Greek debt for months now. A month or so ago European politicians were railing against the hedge funds etc for trying to destabilise the markets.
Unfortunately once again the speculators have been seen to be correct. One wonders if there will be any comeback on whoever was responsible for the repeated misstatement or, lets not beat around the bush here, outright lying over the truthful levels of Greek debt. This has been the real cause of the disaster.
Unfortunately for the Northern European States they are now caught between a rock and a hard place. They can hardly let a Eurozone member default but they cannot find any certain legal way to back them up. Let alone sell it to their respective electorates.
With question-marks over Greece and increased concerns over Portugal, Spain and even Italy the speculators may continue to ply their trade.
If you are looking to trade the markets then spread betting addresses the problem of how to gain quick and simple access to World markets. There is a wide range of markets on offer. You can speculate on thousands of markets such as the Euro/Pound and Euro/Dollar exchange rates. You can also trade stock market indices like the FTSE 100 as well as shares, oil and gold.
If the markets are looking volatile then being able to 'short' a market provides interesting opportunities. You are not limited to solely speculating on markets to go up. If your research suggests that the Spanish Stock Market will go down you can speculate on it to go down. If your research indicates that the Euro/Dollar rate will go up you can spread bet on it to go up.
Before I go further though, it should be pointed out that, as with all forms of speculation, there is a downside. You can lose more than you initially staked.
Like the adverts say; ensure that spread betting matches your investment objectives. Spread bets do carry a high level of risk. Seek independent advice if necessary. Familiarise yourself with the risks involved.
However, there are steps that an investor can take to reduce their level of risk. For example, they could add a Guaranteed Stop Loss to opening trades. If they start losing money on a market and the market continues to move in the wrong direction then the Guaranteed Stop Loss would close the trade when it reached a pre-determined level. This would limit an investor's loss even if the market was extremely volatile and jumped or 'Gapped' between price levels.
There are a number of regulated companies that offer thousands of international markets including companies like FinancialSpreads.com and IG Index. Naturally, they both offer the normal benefits of spread betting including; trading outside market hours, no brokers fees and no commissions.
