A 100% Gain in Greek Stocks?

By Chris Lowe, Editor-at-Large on July 1, 2015

The Greek stock market is closed until at least July 6. But a bet on Greek stocks when it opens again could deliver 100% gains over the next 12 months…

Greeks go to the polls this weekend. They’ll get a chance to vote in a referendum on whether they want to compromise with their creditors or not.

A “yes” vote will pave the way for a deal on debt relief in exchange for economic reforms (aka “austerity”). A “no” vote will likely mean a deal on debt relief… an outright debt default… and a 50% devaluation of Greeks’ savings.

That’s what’s in the cards, if the Greek government is forced to convert euro deposits into the country’s old currency, the drachma.

A Gallup poll this week showed that the majority of Greeks don’t want that. About two out of three Greeks polled said they wanted to remain in the euro zone.

So the most likely outcome – although no means guaranteed – is that the Greeks will vote for compromise.

The Global X FTSE Greece 20 ETF (NYSE:GREK) gives investors exposure to 20 of the largest and most commonly traded stocks listed in Athens. And right now, it’s trading at $10 a share.

070115 DRE GREK

But over the last 12 months, GREK has traded between about $23.50 and $9.50 a share.

If we get a positive outcome for Greece – a “yes” vote over the weekend and a deal on debt relief – GREK could return to where it was before the latest flap over a default.

A bet on Greek stocks would be a pure speculation. But it’s one that has the potential to deliver a 100% profit over the next 6 to 12 months.

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