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The Ultimate Contrarian Trade

If you’re the kind of investor who's willing to go against the crowd, we may have spotted an opportunity for you.

Here's the thesis: The euro is going higher. That's right, higher.

We can hear you laughing from here.

But the euro is at a 4-year low. And lately “the euro is failing to rally on good news — whether of an economic or a political nature,” writes Audrey Childe-Freeman, senior currency strategist for Brown Brothers Harriman, in a note to clients.

“In this context, it is rather controversial to be anything but a euro bear, but this may be the time to identify a few constructive developments and to get prepared for a potential correction” to the upside.

In her note, Childe-Freeman lays out seven reasons be “constructive” the euro in the face of all this pessimism, including:
- the short trade may be too overcrowded,
- the renewed cooperation between the French and German governments.
- the euro zone may be a step ahead of the US in addressing ballooning deficits

She also played down rumors that central banks, including China and Japan, would be selling their euros.

What? You can’t stomach the risk? The Fast Money traders don't love it either.

But they are looking at second derivative trades related to the thesis. They say, consider other securities that benefit as the region recovers from its debt crisis.

Want more insights? Find out what Miller Tabak strategist Peter Boockvar thinks of the idea. Watch the video now! Then tell us what you think!

* Fast Money executive producer wrote about this trade at length in a recent post. Click here to read Ultimate Contrarian Trade: Buy Euro





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Trader disclosure: On June 10, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Kelly owns (GS) puts; Kelly owns (SPY) puts; Terranova owns (IPSU), (BX), (UDN), (PFE), (RSX), (TER), (AXP), (BMO), (BBY), (DIS), (XCO), (SWN), (GLD), (AAPL), (IPI), (SU), (V), (TEVA), (FXB), (CVS); Adami owns (AGU), (BTU), (C), (GS), (INTC), (MSFT)

For Joe Terranova
Terranova works for (VRTS)
Terranova is chief market strategist of Virtus Investment Partners, LTD.
Virtus Investment Partners owns more than 1% of (AMKR)
Virtus Investment Partners owns more than 1% of (IGE)
Virtus Investment Partners owns more than 1% of (DBV)
Virtus Investment Partners owns more than 1% of (XLB)
Virtus Investment Partners owns more than 1% of (XLV)
Virtus Investment Partners owns more than 1% of (XLY)
Virtus Investment Partners owns more than 1% of (XLI)
Virtus Investment Partners owns more than 1% of (XLU)
Virtus Investment Partners owns more than 1% of (DRYS)

For Anthony Scaramucci
SkyBridge Capital owns the UK Pound
SkyBridge Capital owns Gold
Scaramucci owns (GS) and (GS) Puts
Scaramucci and Skybridge Capital own (JNJ)

Brian Kelly
Kanundrum Capital is short (GS)
Kanundrum Capital is short (FXI)
Kanundrum Capital is short (RSX)
Kanundrum Capital is short (XLY)
Kanundrum Capital is short (XLK)
Kanundrum Capital is short (XLE)
Kanundrum Capital is short (XLB)
Kanundrum Capital is short (FCX)
Kanundrum Capital is short EURO
Kanundrum Capital is short POUND
Kanundrum Capital is short SWILL
Kanundrum Capital U.S. DOLLAR
Kanundrum Capital owns (GLD)
Kanundrum Capital owns (TLT)
Kanundrum Capital owns (GFI)
Kanundrum Capital owns (AUY)
Kanundrum Capital owns (GDXJ)


Patty Edwards
Edwards owns (AA) for clients
Edwards owns (GE) for clients
Edwards owns (NSC) for clients
Edwards owns (UNP) for clients
Edwards owns (INTC) for clients
Edwards owns (STM) for clients
Edwards owns (TXN) for clients
Edwards owns (NVDA) for clients
Edwards owns (AAPL) for clients
Edwards owns (HPQ) for clients
Edwards owns (MSFT) for clients
Edwards owns (DELL) for clients
Edwards owns (GOOG) for clients
Edwards owns (JPM) for clients
Edwards owns (BAC) for clients
Edwards owns (C) for clients
Edwards owns (WFC) for clients
Edwards owns (MS) for clients
Edwards owns (RIG) for clients
Edwards owns (NE) for clients
Edwards owns (SLB) for clients
Edwards owns (HAL) for clients
Edwards owns (DO) for clients
Edwards owns (VXX) for clients
Edwards owns (SPY) for clients
Edwards owns (QQQQ) for clients
Edwards owns (GLD) for clients
Edwards owns (ORA) for clients
Edwards owns (KFT) for clients

Barry Ritholtz|
Ritholtz Firm owns (C)

For Edward Mills
**no disclosures **

For Peter Boockvar
Boockvar owns Euros

For Brian Stutland
Stutland Equities makes a market in VIX and SPX options



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