SHORT Saudi riyal -> It's wreckable

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Anonymous
SHORT Saudi riyal -> It's wreckable 2016-01-11 23:19:06 Post No. 1037512
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SHORT Saudi riyal -> It's wreckable Anonymous 2016-01-11 23:19:06 Post No. 1037512 [Report]

Hello,

I want to go short on the Saudi riyal, currency of the Kingdom of Saudi Arabia. What are the cheapest products or strategies to bet on the following scenario:

Right now the riyal has a fix 3.5 SAR/USD peg. However, the Saudis are burning money like no tomorrow and they would need decades of social engineering and conditioning to extract sustainable taxes out of their people. Everybody is living from Oil handouts. Only around 35% of the Saudi population works real jobs (mostly government) and the rest is NEETing. The royal family is forced to keep up the generous subsidies, since they are their only legitimization. The time they have to change their economic model is also too short. With the falling oil price their currency reserves are deteriorating very fast and Oil income is going down while all the western workers, Asian workers are going to continue to send money home. Also the Kingdom imports large amounts of cars, other machinery and luxury goods from all over the world.

With the collapse of the oil price, their trading balance becomes increasingly unsustainable and their central bank will sooner or later be unable to keep the currency peg up. Once they can not peg anymore, the riyal then devalues very fast at least 30-60% like the Russian ruble has done.

So how can one bet on this scenario? I tried to find some FX options or something but there just weren't any or I was too stupid to find them. The only product that I found was the SAR/USD pair on Oanda (I did find no products at all on my home platform Interactive Brokers) but there the margin interest payments are too high I think. Is there a cheaper way.

Please help me /biz/. ;(
1. Is it a sound idea?
2. What are products to short Saudi riyal?
3. What is the best product to structure the bet?

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Anonymous 2016-01-11 23:35:46 Post No.1037537
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Anonymous 2016-01-11 23:35:46 Post No.1037537 [Report]

File: Saudi exports and imports 2014.png (184 KB, 1546x544) Image search: [Google]

184 KB, 1546x544

Picture: Exports and Imports of Saudi Arabia
Export: Mostly oil
Import: Everything

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Anonymous 2016-01-11 23:55:56 Post No.1037573
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Anonymous 2016-01-11 23:55:56 Post No.1037573 [Report]

>>1037512
I want to do to Saudi Arabia what George Soros did to the Bank of England.

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Anonymous 2016-01-12 00:00:42 Post No.1037583
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Anonymous 2016-01-12 00:00:42 Post No.1037583 [Report]

>>1037512
according to your chart, saudis, who more or less only export oil, are sitting on their oil while burning every single piece of currency they have, in a waiting game against nations who, while depend on oil, export a lot of diffrent stuff. So if this is a waiting game, saudis are going to run out of actual cash first, which will force them to sell oil for cheap to refill their cash deposits, while this might not hurt the saudis a whole fucking lot because they have so much oil, its most likely going to affect the oil prices one way or another that the single largest producer of the product has to get rid of alot of it fast if they want to stay internationally signifigant, and its fairly safe to assume that they want to do that.

If saudis went full retard and started selling their oil reserves cheap, how far do you think oil prices would fall before the saudis have to become conservative about it?

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Anonymous 2016-01-12 01:32:16 Post No.1037739
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Anonymous 2016-01-12 01:32:16 Post No.1037739 [Report]

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>>1037573
>I want to do to Saudi Arabia what George Soros did to the Bank of England.
This.
But their currency seems to have no fucking derivatives to bet on.