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http://www.options-trading-education.com/4412/options-trading-after-the-greek-debt-resolution/ - Options Trading after the Greek Debt Resolution - According to the news, the Greek parliament has passed strict austerity measures aimed at resolving their debt crisis. The news was met at home with rioting in the streets while stock markets rose worldwide. Here we look at options trading after the Greek debt resolution. The overall European debt dilemma has been playing out for more than two years. Investors and traders across the globe have been concerned that a debt default by Greece would lead to defaults by one or more of the other so called “PIIGS” group of nations, Portugal, Italy, Ireland, Greece, and Spain. Some feared that that the European Union could, in fact, collapse. In response to the crisis European leaders have given the European Central Bank extraordinary powers to grant loans and print money. Austerity measures are in place and talks are progressing for a write off of part of Greece’s debt. The immediate problem is finally under control but how does a trader pursue options trading after the Greek debt resolution? Is a full scale Euro Zone recovery in the works? Or will austerity measures across the continent lead to a recession?
Banks may be of interest in regard to options trading after the Greek debt resolution. European banks might be first on the list but US banks will also stand to benefit from a more stable European financial situation. Bank stocks in the United States rose on news of the Greek parliament passing austerity measures. Bank stock options in the US may be a good place for US options traders to look for potential profits. However, traders will be well advised to study both bank fundamentals as well as market sentiment before trading. In the near term market sentiment may overreact to good, or bad, news while fundamentals may not change.
Commodities prices will likely rise if a stronger Euro Zone economy is in the works and will probably fall if a recession hits. Both copper and oil options may be somewhat volatile as traders seek to divine whether fixing the Greek debt dilemma will put a stop to worries about national debt defaults and collapse of the European Union. Greek situation may now be stabilized and austerity measures as well as loans from the European Central Bank may serve to calm the fears of investors. However, slower than anticipated European economic growth will lead to reduced industrial production in China and throughout Asia, a reduction in orders of raw materials from countries such as Australia, and changes in economic and monetary policy across the globe. In commodity options trading after the Greek debt resolution, traders will need to be aware of a whole range of things that affect both supply and demand in the commodities markets. The advantages, of options trading after the Greek debt resolution and in all options trading are those of limited investment risk and