DC drama could create a big buying opportunity: Trader

As the deadline for D.C.'s debt ceiling approaches, one trader says that the debate on whether to raise the legal debt limit could create some attractive buying opportunities for investors.

Larry McDonald, head of U.S. strategy at Societe Generale, said that while a deal will surely be reached before a default, markets could still react negatively.

"You must remember from a trading perspective how this will go down. There will be a deal in the end, but the perception of a real problem will grow," McDonald said Thursday on CNBC's "Trading Nation."

Read MoreTreasury postpones 2-year auction on debt ceiling fears

The market hasn't seemed too concerned with the debt ceiling in recent days. On Thursday, the Dow Jones industrial average and S&P 500 closed up about 1 percent, and both traded within about 5 percent of all-time intraday highs.

But McDonald referred to a similar situation in 2013, in which stocks sold off leading up to the debt ceiling. Market volatility also spiked during that time, he said.

"It creates a buying opportunity for stocks, absolutely," he said.

According to Treasury Secretary Jack Lew, the U.S. debt ceiling will be exhausted by Nov. 3, earlier than previous estimates of around mid-November.

If an agreement isn't reached on raising the debt ceiling, the government, unable to pay its bills, could shutdown and default on its debt.

Read MoreDebt-ceiling debate could put money funds into uncharted waters

Andrew Burkly, head of portfolio strategy at Oppenheimer, said the bigger issue may not come until later in 2015, if the government does shut down.

"There's not too much time before this needs to be resolved," Burkly said Thursday. "I think its a short-term issue, but the market is used to getting to the verge and getting over that. And I think that's going to happen once again here."

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Trading Nation is a multimedia financial news program that shows investors and traders how to use the news of the day to their advantage. This is where experts from across the financial world – including macro strategists, technical analysts, stock-pickers, and traders who specialize in options, currencies, and fixed income – come together to find the best ways to capitalize on recent developments in the market. Trading Nation: Where headlines become opportunities.

Michael Santoli

Michael Santoli joined CNBC in October 2015 as a Senior Markets Commentator, based at the network's Global Headquarters in Englewood Cliffs, N.J.  Santoli brings his extensive markets expertise to CNBC's Business Day programming, with a regular appearance on CNBC's “Closing Bell (M-F, 3PM-5PM ET).   In addition, he contributes to CNBCand CNBC PRO, writing regular articles and creating original digital videos.

Previously, Santoli was a Senior Columnist at Yahoo Finance, where he wrote analysis and commentary on the stock market, corporate news and the economy. He also appeared on Yahoo Finance video programs, where he offered insights on the most important business stories of the day, and was a regular contributor to CNBC and other networks.

Follow Michael Santoli on Twitter @michaelsantoli

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