Shorting Euro

[Hyphos]

Seems that Euro will be going on a down trend with ECB's QE. I'm planning to short Euro via EUO, what do you guys think?

 

[w1rbelw1nd]

If everyone thinks the same thing and acted on it, it would have already be factored into the price....

 

[archcherub]

If everyone thinks the same thing and acted on it, it would have already be factored into the price....

won't it be a self-fulfilling vicious cycle?
everyone short, will make it come down faster...

beside, i dont think its "everyone" on money mind here anyway..

 

[Shiny Things]

Seems that Euro will be going on a down trend with ECB's QE. I'm planning to short Euro via EUO, what do you guys think?

So I've got two big problems with this. First one is the trade itself, second one is the vehicle you're choosing to put it on.

First problem: a big chunk of the move has already happened. EURUSD's gone from 1.38-ish to 1.12-ish in the space of a year; I personally think it's going to go a bit lower, and parity's certainly not out of the question, but don't get the idea that this is a terrific trade that nobody else has spotted.

The other thing to keep in mind is that the market's already short EURUSD up to the gunwales (check out the second chart in this post); there aren't that many people left to sell it.

Second problem is the vehicle - EUO - that you're using the put the trade on.

Leveraged and inverse ETFs are never the right answer for any trade longer than a day or so. (The reason is a thing called "volatility decay"; in short, the more volatile the market is, the faster they start underperforming the target index.)

If you really want to do this trade - and god help me, I can't believe I'm recommending this - use the CME FX futures. One lot of the e-micro EURUSD FX futures is €12,500 notional, the brokerage should be pretty small (IBKR charges about ten cents per), and you aren't subject to any horrible rubbish like the volatility decay that you get from ETFs, or the hidden tom/next roll charges you get from trading spot FX, or your broker arbitrarily deciding to stop you out or re-quite your trade like you get from CFD brokers.

Retail traders should never get involved in FX. It's a bad long-term investment; the market itself is incredibly dirty (500-to-1 leverage is just asking "how quickly can we make our customers blow themselves up?"); and it's just uniformly worse than sticking your money in the stock market and leaving it for 20 years. But if you absolutely must gamble your hard-earned on FX, the CME FX futures market is the cleanest way to do it.

 

[Knight_Rider]

won't it be a self-fulfilling vicious cycle?
everyone short, will make it come down faster...

beside, i dont think its "everyone" on money mind here anyway..

US QE took 9 years to recover. Short euro got chance hahahaha.