Psst, want to lose some money fast? Then you, like Goldman’s Global Opportunities Hedge Fund, should have invested in Goldman’s own top trading ideas for 2014, a hedge fund which as we reported is down 2.6% YTD.
But in case you missed out on this sterling opportunity to blow money in nominal and real terms, you are in luck, because seconds ago Goldman’s “smartest men, and women, in the room” released their first Top 8 trades for 2015. Which, as a reminder, are a great moneymaking strategy for Goldman’s flow desk which is on the other side of these trades, and assures a loss for all those, Goldman’s internal hedge funds included, who are on the receiving end of Goldman’s wisdom. And yes, all those who wish to keep shorting those 10 Years – a trade Goldman can’t stop recommending year after year – can just mail a blank check to Goldman right now.
So without further ado, here they are:
Some more detail:
Top Trade #1: EUR/$ downside via a one-year EUR/$ put spread
Position for EUR/$ downside via a one-year 1.20/1.15 put spread for around a 4.5 to 1 potential maximum payout.
We forecast that EUR/$ will fall to 1.15 over the next 12 months, in equal parts a reflection of our Dollar bullish view and Euro bearish outlook. In particular, given that HICP inflation is unlikely to rebound in coming months, there is a chance that additional ECB easing, including possibly sovereign QE, comes sooner rather than later, setting the stage for EUR/$ to move meaningfully lower in the short term.
Top Trade #2: 10-year US Treasuries above 3% but not below 2% in mid-2015, through cap and floor spreads at zero cost
