Italian debt crisis and Option Trading

Discussion in 'Options' started by dudij, Nov 15, 2011.

  1. dudij

    dudij

    The current debt crisis in Italy must present some great trading opportunities.

    I'd probably look to opening a long straddle trade, but I'm not so strong re: technical analysis.

    Was wondering

    1) What vehicles would be the best to trade around the Italian debt crisis.

    2) Opinions regarding technical analysis and the potential for price movements in the next 1-3 months.
     
  2. The best vehicle to trade the Italian debt crisis is, surprise surprise, Italian debt. But you can't do options on it.

    Not really sure what your second question is about.
     
  3. There is a btp future on eurex not sure if it is liquid though.
     
  4. Liquid enough for the sort of size traded by most individuals taking a short term view.

    Get involved, it will put hairs on your chest and nuts.....
     
  5. http://www.eurexchange.com/download/documents/publications/Factsheet_BTP.pdf

    Volume : 14-23.000 per day. Seems 89.25 to be some sort of support....Maybe I throw in a 1000 lot order and squeeze the market "a bit". Should give quant and momentum tarders a nice bost in correlated EUR, bunds and other "related" markets, too. :D
     
  6. Hell yeah... That beast is what truly separates the boys from the men.
     
  7. dudij

    dudij

    Martinghoul:

    What do you think of a general play on the EURO as a proxy for trading options on Italian debt.

    While researching this, I've found the FXE is highly liquid and has tight bid-ask spreads, so good for option trading.

    I'd think of opening a long straddle over the next 1-3 months.

    What do you think?
     
  8. spindr0

    spindr0

    There are a bunch of ETFs, many of which have options. EWI (Italy) has been pummeled but you might look at the other PIIGS as well as other Euro member ETFs.
     
  9. bc1

    bc1

    A Ferrari would be the best vehicle to trade for and help their debt crisis and create a debt crisis for you at the same time.
     
  10. if you take a look at the volume for the past month, a vast majority of it is on the put side so at least you have the liquidity there. sometimes traders have the greatest trade idea but the instrument they're using is so illiquid that the b-a spread eliminates almost all the profit.
     
    #10     Nov 18, 2011