Many financial types are very confident that China will have a financial meltdown in the near(?) future. The fear is so widespread that you can make a lot of money if China’s stock market doesn’t go to hell.
Bloomberg reports that there are so many bets against the Chinese stock market now that banks seeking to balance the scales are now offering relatively huge returns for bets on the Chinese stock market not going down. We’ll spare you the financey details of the investment, but the upshot is that you can now buy a financial product that will pay you a return of 23% if Chinese stocks rise by as little as 0.1% over the course of a year. In other words, if the stock market simply doesn’t decline, you get paid out a 23% gain. Compare that to the average annual gain of the S&P 500, representing large U.S. stocks, over the past ten years: less than 5%.
Easy way to make big $$$! The only catch is that the reason the payout on this bet is so large is that so many people are very confident that the Chinese stock market is gonna tank. But do they have a crystal ball? No—they don’t. Or if they do, it’s a mere trinket with no predictive powers.
If you do make this investment, please contact me, as I have some other outlandish gambles to offer a man with your sophisticated taste for risk.