Euro Zone Recovery
 

Euro Zone Recovery

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http://www.Options-Trading-Education.com - Euro Zone Recovery - A Euro Zone recovery may be in the works. Stocks rallied in Europe on news that Germany, as well as China, manufacturing indices came in ...

http://www.Options-Trading-Education.com - Euro Zone Recovery - A Euro Zone recovery may be in the works. Stocks rallied in Europe on news that Germany, as well as China, manufacturing indices came in higher than forecasted. A sign of renewed confidence on the continent was the lower interest rates paid at auction for Italian bonds although French bonds weakened. Meanwhile the Euro fell against thirteen of the sixteen currencies that it trades against. After the European Central Bank dispensed loans to a large number of ailing banks the specter of a run on French banks has receded. For options traders a Euro Zone recovery could mean profits in European stocks or in trading options on the Euro. Much of the difficulty in trading the Euro or European stocks has come from uncertainty. Many doubted the willingness of the EU to come up with the money needed to bail out ailing economies. Many also doubted the ability of the EU to come up with a solution that did not simply encourage greater and greater debt. The recent EU economic summit may have come up that solution and the key to longer term Euro Zone recovery. Trading options on Euro Zone stocks could be profitable.

The recent EU summit arrived at two useful solutions. One is that going forward Euro Zone economies will be more closely linked, with the end result that it will harder for nations to overspend. The other is that the European Central Bank now has more flexibility and independence in dealing with both insolvent banks and insolvent nations. The bank recently made loans of roughly half a trillion Euros to stabilize the continental banking system. Investors and traders were first relieved that the bank was putting things in order. Then everyone seemed to change their minds and worry that the various banks needed so much money in the first place. Nevertheless, the fact that the EU seems to have a clearer game plan and that they are taking firm action seems to have pleased the markets. The French austerity plan is a good case in point. Now the news that manufacturing is stronger in Germany, the continent’s leading manufacturer, leads traders and investors to believe that a Euro Zone recovery is in the works. It also does not hurt that manufacturing in China came in ahead of forecasts and that the US economy seems to be finally picking up steam.

A Euro Zone recovery will not necessarily mean that all stocks will rise. For example, investors and traders are more interested in German companies as the German economy is stronger and more stable. As evidenced by the rise in stocks and fall in the Euro recently it could well be that a developing Euro Zone recovery might not be linked to a stronger Euro, at least in the short term. This is, of course, one of the reasons why many buy options. Whether it is dealing with volatile foreign currency rates or a chaotic stock market, traders can hedge their investment risk when buying calls or puts on stocks or currencies.

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Euro Zone Recovery Euro Zone Recovery Presentation Transcript

  • A EURO ZONE RECOVERY MAY BE IN THEWORKS. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • STOCKS RALLIED IN EUROPE ON NEWSTHAT GERMANY, AS WELL AS CHINA,MANUFACTURING INDICES CAME INHIGHER THAN FORECASTED. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • A SIGN OF RENEWED CONFIDENCE ON THECONTINENT WAS THE LOWER INTERESTRATES PAID AT AUCTION FOR ITALIANBONDS ALTHOUGH FRENCH BONDSWEAKENED. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M View slide
  • MEANWHILE THE EURO FELL AGAINSTTHIRTEEN OF THE SIXTEEN CURRENCIESTHAT IT TRADES AGAINST. AFTER THEEUROPEAN CENTRAL BANK DISPENSEDLOANS TO A LARGE NUMBER OF AILINGBANKS THE SPECTER OF A RUN ONFRENCH BANKS HAS RECEDED. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M View slide
  • FOR OPTIONS TRADERS A EURO ZONERECOVERY COULD MEAN PROFITS INEUROPEAN STOCKS OR IN TRADINGOPTIONS ON THE EURO. MUCH OF THEDIFFICULTY IN TRADING THE EURO OREUROPEAN STOCKS HAS COME FROMUNCERTAINTY. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • MANY DOUBTED THE WILLINGNESS OF THEEU TO COME UP WITH THE MONEY NEEDEDTO BAIL OUT AILING ECONOMIES. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • MANY ALSO DOUBTED THE ABILITY OF THEEU TO COME UP WITH A SOLUTION THATDID NOT SIMPLY ENCOURAGE GREATERAND GREATER DEBT. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • THE RECENT EU ECONOMIC SUMMIT MAYHAVE COME UP THAT SOLUTION AND THEKEY TO LONGER TERM EURO ZONERECOVERY. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • THE RECENT EU SUMMIT ARRIVED AT TWOUSEFUL SOLUTIONS. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • ONE IS THAT GOING FORWARD EURO ZONEECONOMIES WILL BE MORE CLOSELYLINKED, WITH THE END RESULT THAT ITWILL HARDER FOR NATIONS TOOVERSPEND. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • THE OTHER IS THAT THE EUROPEANCENTRAL BANK NOW HAS MOREFLEXIBILITY AND INDEPENDENCE INDEALING WITH BOTH INSOLVENT BANKSAND INSOLVENT NATIONS. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • THE BANK RECENTLY MADE LOANS OFROUGHLY HALF A TRILLION EUROS TOSTABILIZE THE CONTINENTAL BANKINGSYSTEM. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • THE BANK RECENTLY MADE LOANS OFROUGHLY HALF A TRILLION EUROS TOSTABILIZE THE CONTINENTAL BANKINGSYSTEM. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • THEN EVERYONE SEEMED TO CHANGETHEIR MINDS AND WORRY THAT THEVARIOUS BANKS NEEDED SO MUCHMONEY IN THE FIRST PLACE. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • NEVERTHELESS, THE FACT THAT THE EUSEEMS TO HAVE A CLEARER GAME PLANAND THAT THEY ARE TAKING FIRM ACTIONSEEMS TO HAVE PLEASED THE MARKETS. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • THE FRENCH AUSTERITY PLAN IS A GOODCASE IN POINT. NOW THE NEWS THATMANUFACTURING IS STRONGER INGERMANY, THE CONTINENT’S LEADINGMANUFACTURER, LEADS TRADERS ANDINVESTORS TO BELIEVE THAT A EURO ZONERECOVERY IS IN THE WORKS. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • IT ALSO DOES NOT HURT THATMANUFACTURING IN CHINA CAME INAHEAD OF FORECASTS AND THAT THE USECONOMY SEEMS TO BE FINALLY PICKINGUP STEAM. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • A EURO ZONE RECOVERY WILL NOTNECESSARILY MEAN THAT ALL STOCKSWILL RISE. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • FOR EXAMPLE, INVESTORS AND TRADERSARE MORE INTERESTED IN GERMANCOMPANIES AS THE GERMAN ECONOMY ISSTRONGER AND MORE STABLE. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • AS EVIDENCED BY THE RISE IN STOCKSAND FALL IN THE EURO RECENTLY ITCOULD WELL BE THAT A DEVELOPINGEURO ZONE RECOVERY MIGHT NOT BELINKED TO A STRONGER EURO, AT LEASTIN THE SHORT TERM. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • THIS IS, OF COURSE, ONE OF THE REASONSWHY MANY BUY OPTIONS. WHETHER IT ISDEALING WITH VOLATILE FOREIGNCURRENCY RATES OR A CHAOTIC STOCKMARKET, TRADERS CAN HEDGE THEIRINVESTMENT RISK WHEN BUYING CALLSOR PUTS ON STOCKS OR CURRENCIES. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M
  • LIKEWISE THE ABILITY TO LEVERAGEINVESTMENT CAPITAL GIVES OPTIONSTRADERS THE OPPORTUNITY TO MULTIPLYTHEIR GAINS SHOULD A STRONG EUROZONE RECOVERY EMERGE. W W W. O P T I O N S - T R A D I N G - E D U C AT I O N . C O M