Trading on Greek Default Fears (NBG, EPV, FXE, DRR)

The Euro fell during early Monday trading over concerns that the Greek government may seek a restructuring of the bailout it agreed to last year and the strong showing in Finnish elections of a political party that opposes eurozone bailouts. The Greek government faces intense internal pressure to restructure its debt because of the severe measures that were agreed to during the country's bailout. The measures, which included tax increases and spending cuts, have proven widely unpopular and many Greeks say it would better to restructure now instead of facing years of austerity. One of the signs of growing fear that Greece may default on the bailout agreement that it reached last year with the International Monetary Fund (IMF) and the European Union is that the cost of insuring against a Greek default has climbed to record highs. Although the Greek government says that it is not seeking a debt restructuring, that has not settled the markets, as investors have become accustomed to European leaders saying that they aren't seeking outside assistance, only to turn around and announce plans for bailouts. Restructuring now would limit Greece's access to global financial markets for years to come but many Greeks see that as preferable to the country's current economic situation. The markets have also been rattled by the strong showing of the euro-skeptic True Finns party in a Finnish parliamentary election. The party, which opposes bailouts of weaker eurozone countries, managed to win 19% of the vote. Although it's unlikely that the True Finns will be able to block future bailouts, the Finnish election results are a sign of growing anti-bailout sentiment among the citizens of countries like Germany and Finland who don't want to pay for the mistakes of politicians in other eurozone countries like Greece, Ireland and Spain. The possibility that Greece may default or restructure its debt and the Finnish election results have already sent borrowing costs higher for other countries like Spain. Depending on how an investor sees the situation in Greece and Europe playing out, there are a number of investment options. National Bank of Greece SA NBG is a diversified financial services company that operates primarily in Greece. If Greece manages to avoid a default or any kind of restructuring of its debt, this stock's share price should move higher. If Greece restructures its debt, it will not bode well for investors in other countries such as Ireland, Portugal and Spain. In this scenario, the ProShares UltraShort MSCI Europe ETF EPV would be an investment option to consider. The CurrencyShares Euro Trust FXE and the Market Vectors Double Short Euro ETN DRR are two more investments options for investors to look into, depending of the outcome of the current Greek situation.