Greek crisis: How to trade the volatility

Global markets are being served a heavy dose of uncertainty and turmoil as a crisis in Greece deepens. Analysts told CNBC how savvy investors should navigate the turbulence.

"I think you try and position for a bit of the worst right now," said Richard Kelly, head of global strategy at TD Securities, as European stock markets fell by as much as 4 percent on Monday.

Read MoreGlobal markets slide on Greek crisis fears

Yields on Spanish, Italian and Portuguese, as well as Greek, government bonds jumped and U.S. stock markets opened lower after Greek banks and the stock market were closed on Monday and capital controls were imposed on bank withdrawals. Banks were expected to remain shut until after a July 5 snap referendum called by Greece's prime minister this weekend on whether to accept the further austerity measures demanded by euro zone partners in return for desperately-needed cash.

Position for worst

With the uncertainty expected to last for days, strategists recommended shorting the euro, snapping up "safe-haven" gold and looking to snap up beaten-down bonds in smaller European countries such as Spain and Portugal.

"A lot will depend on how the polls start to come in. In general, anyone whether long term or short term, will try and short the euro," Kelly told CNBC.

"Within fixed income, you do go into safe havens. Some people are looking at the periphery as a bit of value given the blow-out it in yields," he added.

Read MoreGreece: Uncertainty reigns after referendum gamble

The yield on the 10-year Spanish government bond was last trading at about 2.28 percent. Last week the yield rose as high as 2.41 percent, its highest level since August last year.

Spain, Italy and Portugal are seen as the most vulnerable of the euro zone economies to a crisis in Greece, although less so than a few years ago, thanks to measures taken by those countries to strengthen their banking systems—not to mention the European Central Bank's 1 trillion euro ($1.1 trillion) monetary stimulus program to bolster economic growth in the 19-member euro area.

"I don't think today is the day to rush out and make money but during the course of the week as we move away from uncertainty and confusion towards something that is likely to be a 'yes' vote on Sunday, I think there will be buying opportunities–-Spanish and Italian yields moving about 2.5 percent are good entry points," Patrick Armstrong, CIO of Plurimi Investment Managers, told CNBC, referring to the referendum.

Bet against euro?

Most analysts said they would recommend taking a short position on the euro – in other words bet that the currency would weaken.

However, the euro proved resilient to the turmoil in Greece on Monday, recovering about 2 percent of its initial fall to trade about 0.16 percent lower at $1.1146.

Aris Messinis | AFP | Getty Images

"I'm going to short the euro into the highs," Boris Schlossberg, managing director at BK Asset Management in New York told "Squawk Box," adding that the ramifications of the Greek crisis were "not over yet."

Safe havens – bonds or gold?

In terms of which safe-haven assets were the most appealing, Tim Condon, head of research for Asia at ING Financial Markets, said he favoured gold against Treasurys. Both the precious metal and U.S. sovereign bonds are often seen as safe-haven assets at times of global market turmoil.

"Gold is doing well this morning and it is the safe haven that a lot of people will look to," Condon said. "Maybe it's better today than Treasurys because Treasurys are buffeted by worries of a Fed rate hike," he added, referring to the prospect of a rise in interest rates by the U.S. Federal Reserve in the months ahead.

Gold was trading at $1,1176 per ounce on Monday, up about a third of a percent on the day.