How to short the peso?

Adrian Bye

Bronze
Jul 7, 2002
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Now would be a great time to short the peso. We have
- an election upcoming
- price fixing by the government
- a still unstable economy

I noticed that barnabe recently bought US$10k at RD$45. A smart investment; he should be able to change back at a very favourable rate in a few weeks.

What would stop most foreigners is that we have few assets in the DR to convert to USD.

So how can we short without incurring liquidity problems (ie, buying real estate as owner financed would be not very liquid).

Any suggestions? Is anyone shorting the peso currently?

Adrian
 

JAMIE

New member
Jun 10, 2002
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Short? Long? It is trade-off, all up to your strong belief

I don't know how many foreigners are shorting the Pesos now, It may be a waiting period to see who is the winner of the President election.

Either short position or long position on Pesos is personal choices. Theoretically, short Pesos, Long Dollars are pretty true in DR now (not so sure for the future yet), but one of the most important things is "TIMING."

Short Pesos without incurring the liquidity problems? I think you are talking about the liquidity of the real estate? or something else?

If you really have a strong belief that it is worthy to bet on the short of Pesos, long dollars, you may:

Borrow the Pesos from Banks, Financial Institutions, or local loan markets with collaterals...etc, make sure the interests you are paying is within the tolerance level as opposed to the rate of appreciation of the dollars you estimate in the future.

Good Lucks !!!!!
 

DRshooter

New member
Apr 23, 2004
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45
Risky Business...

There are somethings in life that are for sure...
1-Death
2-Taxes
3-The Damned peso will always go down against the dollar...especially with the "talent" in the current economic team.
 

Barnabe

Member
Dec 20, 2002
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Gambling

I did not invest in USD: I purchased dollars because i needed them for business purposes. I definitely would not gamble on peso falling further against dollar before the election. If Leonel wins can you be sure the peso will collapse? I would not bet on it.. As a money changer myself in France for 16 years many people ask me what do you think, I always say that I do not think, I buy and I sell. It is not like investing in real estate.

The thing in dominican exchange market is that you can have BIG changes in the peso value within 2 or 3 days AND sometimes a shortage of USD or Euros. So if you want to play with the exchange market in my opinion it would be through quick buying and selling. Also you can have a better deal buying euros than dollars.

Barnabe
 

JAMIE

New member
Jun 10, 2002
47
2
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Who gains?

Barnabe said:
I did not invest in USD: " If Leonel wins can you be sure the peso will collapse? I would not bet on it.."

"So if you want to play with the exchange market in my opinion it would be through quick buying and selling."
Barnabe

True on above 2 points.

The real big winners in the exchange rate games are those who work in the Central bank and high government officials.

The exchange rate in here is purely manipulated by human beings.
 

Nelly

Bronze
Jan 1, 2002
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Are you saying that if you have pesos sitting in the bank, now is the time to change them to dollars?
 

JAMIE

New member
Jun 10, 2002
47
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If you believe the dollar will go up soon

Yes, if you believe the dollars will go up soon, of course you can use your spare extra pesos to buy dollars and wait for the dollars go up and change dollars back to pesos. You gain in pesos, easy work, but it needs your guts and your sensitive decisions, and your risk tolerance level. Not everybody has the same kind of risk tolerance level.

H/e, if dollars go down and if you change dollars back to pesos, then you lose the pesos, meaning you can not get back the equal amount of the pesos that were used to buy the dollars.

It is "speculative money". Be prepared in case you lose.

Q: How many people can really make money in the exchange markets? I think there are few, but not too many though. One exceptional case is the the "Hipo's team", I think they are big winners in easily way.
 

Adrian Bye

Bronze
Jul 7, 2002
2,077
138
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My prediction:

After the election (which Leonel will win), we will see some massive instability, as the pressure cooker that is happening right now explodes. Leonel's government will uncover some big problems in the Hippolito's government, there will be a huge scandal, and things will be a bit rocky. The peso will hit at least 60:1. Finally things will start to stablize later on, around January 2005.

So yes, if you have pesos, now is the time to convert to USD.

Aren't sure? Bet against me! Convert your USD into pesos and see how you do. :)