4 ms·

I expect this to be a wealth transfer event and personally I am going to make some cheeky One-Cancels-the-Other Order (OCO) bids and cheeky offers on the pound

by icu 12y ago

I expect this to be a wealth transfer event and personally I am going to make some cheeky One-Cancels-the-Other Order (OCO) bids and cheeky offers on the pound and on publicly listed Scottish companies, especially financial stocks. I expect price action will likely surge upon confirmation of where this vote will go and I'm betting I'll be able to make a profit from this event. In my experience the market always overshoots upon 'risky' events and reverts back to the mean. I would be interested to hear if anyone else sees this vote the way I do (or doesn't)?

fidotron 12y ago
I'm an English person that lives in Quebec, and going from what I know growing up in the UK and what I have seen here with the current polling I'm convinced not going for independence will work out worse. The reason is markets really hate uncertainty. Given a close but non-final referendum the result isn't certainty: it's potentially decades of uncertainty. Quebec has had this for over 30 years and it's destroyed the place. (To be clear, I don't think Quebec should go independent now, but if it was going to 1980 was the time). Independence has many unknowns, but a lot of them are of the kind where solutions mysteriously won't be available until the problem actually presents itself. For example, the Scottish EU question is a lot of bluffing on both sides, but you can't help thinking the reality will prove to be a lot less exciting. After 5-10 years it will settle down a bit, but if the status quo is preserved with the potential for another one you can watch all the businesses hedging their bets with stuff going south of the border for decades to come, while the economy in the north becomes even more dependent on the public sector, which is a recipe for trouble. As a result I don't think anyone taking too strong a financial position based on this coming out one way or the other is particularly wise.
- icu 12y ago
  Right I get what you're saying but this isn't a long term trade, I'm looking to set up a sort of 'jack in the box' trade where if price leaps up or leaps down I'll catch the ride and then cash out. I expect this trade will be done in a day. For example, I remember being in NZ when Air NZ (publicly traded national airline) was in financial trouble and their share price was tanking. As soon as I could I bought up loads of shares on the (correct) assumption that the NZ Government wouldn't let the only national carrier go bust. Sure enough the NZ Government announced a rescue package and I made some good money. Thankfully I had the good sense to bet on Uncle Sam in 2008 and made a killing in options. My point is that sometimes politics makes for 'wealth transfer' events in the market.

by icu 12y ago

fidotron 12y ago

I'm an English person that lives in Quebec, and going from what I know growing up in the UK and what I have seen here with the current polling I'm convinced not going for independence will work out worse. The reason is markets really hate uncertainty. Given a close but non-final referendum the result isn't certainty: it's potentially decades of uncertainty. Quebec has had this for over 30 years and it's destroyed the place. (To be clear, I don't think Quebec should go independent now, but if it was going to 1980 was the time). Independence has many unknowns, but a lot of them are of the kind where solutions mysteriously won't be available until the problem actually presents itself. For example, the Scottish EU question is a lot of bluffing on both sides, but you can't help thinking the reality will prove to be a lot less exciting. After 5-10 years it will settle down a bit, but if the status quo is preserved with the potential for another one you can watch all the businesses hedging their bets with stuff going south of the border for decades to come, while the economy in the north becomes even more dependent on the public sector, which is a recipe for trouble. As a result I don't think anyone taking too strong a financial position based on this coming out one way or the other is particularly wise.

icu 12y ago
Right I get what you're saying but this isn't a long term trade, I'm looking to set up a sort of 'jack in the box' trade where if price leaps up or leaps down I'll catch the ride and then cash out. I expect this trade will be done in a day. For example, I remember being in NZ when Air NZ (publicly traded national airline) was in financial trouble and their share price was tanking. As soon as I could I bought up loads of shares on the (correct) assumption that the NZ Government wouldn't let the only national carrier go bust. Sure enough the NZ Government announced a rescue package and I made some good money. Thankfully I had the good sense to bet on Uncle Sam in 2008 and made a killing in options. My point is that sometimes politics makes for 'wealth transfer' events in the market.