27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
While the world is watching the drama over Greece unfold on a day-to-day basis, many investors are wondering how much market risk is involved in the Greece situation and what ways, if any, can investors profit from the turmoil. In a new report, Morgan Stanley analyst Graham Secker answers both of these questions for concerned investors.
Timing is everything
According to Graham, the ultimate market effects from the Greece situation will vary depending on timeframe. In the short-term, the uncertainty surrounding Greece and fear of contagion, especially within global financial sectors, will likely continue to produce stock market weakness. However, Graham believes that these fears are generally overblown.
“We believe a lack of significant contagion, a proactive EU policy response and the reduced risk of a muddle-through scenario for Greece going forward should allow equities to make solid gains over the medium-term,” Graham explains.
The long-term effects that the Greece situation will have on global financial markets remains unclear at this time.
Contagion is key
Greece itself accounts for only about 2.0 percent of Europe’s GDP and it is no longer a member of MSCI Europe. Although Greece’s actual impact on the European economy is tiny, Morgan Stanley sees fears of contagion as the main risk.
Previous panics over Greece have led to 14-20 percent equity de-rating in Europe, but Graham believes that the risk of the level of peripheral spread-widening that accompanied previous panics is minimal.
Stock picks
According to Morgan Stanley, investors looking to buy stocks on any short-term weakness that comes as a result of peripheral spread-widening should looks to stocks with high exposure to peripheral European economies. The firms names ING Groep NV (NYSE: ING) as a U.S.-listed stock play on potential Greece-related market weakness.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
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