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If I wanted to risk a few hundred dollars in propping up the Greek government, is there an easy way to this? Or is there a minimum investment way larger than I
by laaph 15y ago
If I wanted to risk a few hundred dollars in propping up the Greek government, is there an easy way to this? Or is there a minimum investment way larger than I'd like to commit and/or only open to licensed brokers only?
(Apologies for stupid newbie investor questions... I read about this stuff in the news, but I have no idea how it actually works.)
- AHorihuela 15y agoYou'd need to get a brokerage account that allows you to trade sovereign bonds. (I think TD Ameritrade might do). And from there it should be a straight shot. The only problem is that if you invest only a few hundred bucks, trading commissions (~$20 to buy and sell) eat up a big portion of your (potential) returns. For example, if you invest $200 and come out of your trade even (selling bonds back to the market for $200), you still pay $20 in trading commissions, so you'd be already down 10% on your trade. In other words, you'd need to be up 10% on your trade (which is very nice) in order to just compensate for commissions.
- anamax 15y agoDoes buying existing bonds help prop up the Greek govt? Remember - they don't get any money from that transaction. If you want to help prop up the Greek govt, you probably have to give it money, that is, buy new bonds from it. It's probably not offering to pay 74% on such loans. And, given the yield of current bonds, it's probably not even bothering to try to sell bonds.
- hugh3 15y agoDoes buying existing bonds help prop up the Greek govt? Remember - they don't get any money from that transaction Well in some sense... if you create demand for the existing bonds then you create confidence in them, and hence drive down yields on the next round of bonds that get issued.