Spain economy down, what to trade?

Discussion in 'Trading' started by andreasind, Apr 27, 2012.

  1. Hi
    I am a newbie learning to trade stocks and option :D
    If Spanish economy is currently under huge debt and unemployment jumped to 18 years high of 24.4%.

    Given all this facts, what is the best trade for it? I am thinking of selling $26 call on EWP, does it still make sense since the stock had fall 20% in the last 2 months.
  2. If you're new to trading - don't be selling naked calls. PERIOD.

    You'd probably be better off with covered calls on an inverse ETF like EDZ or even TZA at least you can keep writing calls every month if the market goes up and you won't lose all your money if the market surges to the upside.

    With EWP back to Mar 2009 levels now is not the time to be shorting it IMO.... the US markets have shrugged off every bit of bad news lately I think they'd be more likely to crash down then EWP at this point...

    Also you don't want to get in the way of any new QE news -

    Don't forget the S&P 500 companies do about half their business in Europe, so what happens in EU does effect the SPY whether the SPY chart reflects that or not.
  3. Why was that? Let say if there is another round of QE, will that be bullish for US stocks?

    Will it be better to trade calendar calls for VGK (MSCI Europe ETF) since they are 5.3% off April's low.