http://www.Options-Trading-Education.com - Global Currency Crisis Options Trading
In the developing global currency crisis, options trading is probably a currency trader's best bet. As the US government counts down to debt default the majority party, the once-responsible Republicans, are filling the airwaves with rhetoric. Democrats fear that every social program of the last generation will be lost in a massive game of "chicken" running up to the second of August when the US government will no longer have legal authority to borrow. The absence of the former leader of the International Monetary Fund head, Dominique Strauss-Kahn, seems to be hurting discussions to alleviate the European debt crisis as the clock ticks on sovereign debt in Greece, Italy, Spain, and Portugal. As cooler heads fail to prevail in North America and Europe the Euro vies with the dollar to see which can be the more unstable currency. Currency traders seeking to profit from these dilemmas will typically wish to hedge investment risk. In this evolving global currency crisis options trading provides traders with a means of limiting investment risk and leveraging investment capital. In times of crisis options trading limits risk to the price of an options contract, the premium. Buying options on the dollar, Euro, Swiss franc, British pound, or other currencies can result in profits many times the trader's investment.
From a political viewpoint the chickens, in this game of "chicken," have come home to roost for President Obama. It was during the last Bush administration that then-Senator Obama voted against raising the debt ceiling, on his way to the White House. Now a raft full of Republican presidential hopefuls are posturing in the same way that Obama did and blocking the way to a timely solution to a short term fix of the debt crisis in the USA. Local politics seem to have more sway in countries such as Greece where organized labor demonstrations oppose austerity measures demanded by foreign creditors, in return for continuing to finance Greek debt. As rhetoric and political demonstrations play out in the media, currency traders concern themselves with hedging currency risk in international business. While the politicians posture Boeing, 3M, Cargill, GM, Cisco, Microsoft, and many other US multinationals must execute currency transactions in order to do business. The potential of a very unstable US dollar, or the Euro in free fall, makes doing business across borders difficult, and even economically dangerous. It is no surprise that a group of US business leaders sent what has been described as a "why don't you all grow up" letter to the president and every member of congress, outlining the potential devastation that a debt default would have on the US economy. How to trade options and gain profits in global currency crisis options trading profits may well depend upon the trader's ability to sort out clues to the eventual outcome of both US and European debt crises from the chaff of political rhetoric.
Meanwhile global currency crisis options trading is favoring the Swiss franc in Euro options trading versus the Swiss currency. While the US and the European community deal with debt issues the Swiss have a current account surplus. They don't need to borrow from anyone to fund their government. Also Switzerland has an unemployment rate of about a third that seen in the Euro zone or the USA (three percent versus nine percent). However, remember that in global currency crisis options trading, or any options trading, what goes up can come down, and vice versa. That is why buying options offers a means of hedging risk as well as leveraging profits.
http://www.youtube.com/watch?v=ZrfGLmlt6IY
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The Greek deal is too late: Varoufakisby protesthe13,635 views
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