How You Can Take Ad­van­tage of the Low Euro

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up a few laps around the Parthenon and a gyro.

Pay for ho­tels up front… and ev­ery­thing else

“It doesn’t get bet­ter than this,” wrote Her­rera. “When was the last time the euro was at this level? 2003?”

“Make your plans now,” he added. “Of­fer to pay for the trip to­day. It’s an ex­cep­tional deal. Peo­ple have been ac­cus­tomed to spend­ing $1.38 or $1.40 for the euro at its peak.”

Don’t wait to get there; pay for ev­ery­thing now. This ap­plies even to ser­vices that nor­mally ac­cept just a de­posit. Many ho­tels, for ex­am­ple, just re­serve some space on a card but ac­tu­ally charge the bill upon check­out. See how much they’ll let you ac­tu­ally pay right up front. A 100 euro ho­tel room will cost $106 to­day, but $120 if the euro goes back up to $1.20 in the next few months. That $14 would be just lost money. Mul­ti­ply that by five days or a week, and you’re talk­ing about more sig­nif­i­cant cash.

This goes for just about any­thing. Book now and pay up front for ev­ery­thing from crepe tast­ing to Ger­man dun­geon tours (great chance for that mag­i­cal pro­posal). Don’t waste money, but if you’ll pay even­tu­ally then pay less by pay­ing now.

Go far­ther, longer

“Ex­plore more of a des­ti­na­tion,” Her­rera wrote. “You can dis­sect a des­ti­na­tion so many dif­fer­ent ways. Stay longer. You’ll get a bet­ter value. I was just in Lon­don a week and a half ago. How many times have I been to Lon­don? I vis­ited the Shangri-La Ho­tel, at The Shard, Lon­don near Lon­don Bridge. That was ex­plor­ing a new part of the city for me.”

Take ad­van­tage of a newly

cheaper con­ti­nent to stay longer than might oth­er­wise have been pos­si­ble. Ex­plore new des­ti­na­tions and get off the beaten path, be­cause it’s there. Cost of­ten drives Amer­i­cans home early. This sum­mer, though, that may have changed.

In par­tic­u­lar, con­sider some new des­ti­na­tions that the tum­bling cur­rency might un­lock. Por­tu­gal and Greece are sur­pris­ing bar­gains for trav­el­ers look­ing for some­thing dif­fer­ent than the usual Lon­don-Paris-Rome tri­fecta. Her­rera rec­om­mends Por­tu­gal’s Douro val­ley for un­ex­pect­edly great food and wine, while a trip around the Cy­clades can be one of life’s most un­for­get­table and shock­ingly bud­get friendly des­ti­na­tions if you don’t mind skip­ping the re­sort in fa­vor of a guest­house and water­side tav­erna.

That’s more fun any­way.

Forex Ef­fects

Fi­nally, we would be re­miss if we didn’t give a nod to the money mak­ing op­por­tu­nity here. Eu­ros are a valu­able com­mod­ity and right now they are cheap. Odds are pretty de­cent the cur­rency will re­bound, and the best way to cel­e­brate is with some bub­bly bought cour­tesy of the forex (for­eign ex­change) mar­ket.

Cur­rency mar­kets are a form of trad­ing and in­vest­ment, much the same as stocks and se­cu­ri­ties and based upon the same ba­sic prin­ci­ples. Buy low, sell high and look for an in­stru­ment that seems un­der­val­ued. Like any other form of in­vest­ing this comes with risks. The euro is low for a rea­son. If those struc­tural prob­lems grow, it could con­tinue to col­lapse and take your dol­lars with it.

On the other hand, it might be go­ing through a tem­po­rary slump and ev­ery dollar spent on a euro right now might be worth $1.25 later this year.

Just in case, how can you get your share? For starters, there are three gen­eral forex ex­changes: spot, fu­tures and for­wards. The spot mar­ket is how peo­ple gen­er­ally trade cur­ren­cies. It’s the mar­ket where you buy cash, hold it and then liq­ui­date in an­other cur­rency at the cur­rent price.

In other words, it’s the fancy ver­sion of stuffing your pock­ets at the ATM then hit­ting a cur­rency win­dow on the way home.

Fu­tures and for­wards are un­com­mon for the ca­sual in­vestor. In th­ese mar­kets, in­vestors trade in long term con­tracts over cur­rency trans­ac­tions. The larger na­ture of th­ese con­tracts al­lows in­vestors to smooth out risk since they can in­volve mul­ti­ple trans­ac­tions or cur­ren­cies, but this also makes fu­tures and for­wards an un­ap­peal­ing op­tion for the small in­vestor (read: not a bank).

How to trade and open a forex ac­count? It’s prob­a­bly a lot smarter to trade for­mally than to hit an ATM in Brussels and hope for the best. Most on­line bro­ker­ages like E-Trade will of­fer this ser­vice, so the best op­tion is to open a bro­ker­age ac­count with sites like this. Ig­nore in­vi­ta­tions to lever­age (trad­ing with bor­rowed money). This is popular in the small-mar­gin world of cur­rency trad­ing, but it’s also a great way to lose your shirt; that’s be­cause the the­ory is to re­pay the bor­rowed money with prof­its from when your in­vest­ment pays off.

Does any­one see what’s wrong with this plan?

Pay at­ten­tion to four types of or­ders that will make trad­ing life a lot eas­ier, es­pe­cially when deal­ing with mar­kets that may get most frisky while Amer­i­cans are tucked into bed. Mar­ket or­ders buy up the cur­rency of your choice at mar­ket value. This is a ba­sic in­struc­tion to buy and sell at the cur­rent price. Limit or­ders are an in­struc­tion to buy, but only when the cur­rency gets cheap enough. For ex­am­ple, you could set an in­struc­tion to dive into the pool as soon as the euro reaches par­ity with the dollar.

Con­sider too the value of a take­profit or­der. Th­ese al­low you to set a tar­get sell off po­si­tion. For ex­am­ple, let’s say you think the euro will peak around $1.30 but are wor­ried you’ll miss it while binge watch­ing “House of Cards”. (No one can tear him­self away from a Kevin Spacey mono­logue.) In­stead, set a take-profit or­der that would dump the en­tire ac­count at that magic num­ber. It guar­an­tees you won’t miss that high wa­ter mark, so long as it hap­pens... but no one says the po­si­tion won’t keep go­ing up long af­ter you’ve sold.

Fi­nally, don’t for­get about stop-loss or­ders. The euro might go back up… or Greece might fi­nally jump ship, trig­ger a con­ti­nen­tal cri­sis and send ev­ery­one in Ber­lin scram­bling for their left­over Deutschmarks. That’s when an au­to­matic or­der to sell off ev­ery sin­gle note if they ever hit $0.80 will come in handy. You’ll take a loss, but not a com­plete bath. Hence the name.

Is forex trad­ing a magic bul­let? No. It’s in­vest­ing. But for any­one con­vinced that the euro has nowhere to go but up, it might also be a pretty good shot at putting your money where your mouth is. Af­ter all, the euro has been one of the few cur­ren­cies in the world stronger than the dollar for sev­eral decades. The for­eign ex­change mar­kets might just be a way to turn that tem­po­rary slump into some nice walk­ing around money for the sud­denly-cheap va­ca­tion.

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