Trade of the Week: Hedging against eurogeddon

A multi-billion dollar hedge fund has structured a trade it thinks could make gains of 50%, should Italy leave the euro

A multi-billion dollar US hedge fund has structured a trade on Italian sovereign bonds that it thinks will make 50% for its portfolio in the event of a eurozone collapse.

A partner at the firm's London office told Financial News: "The real risk for a European portfolio right now is a break-up of the eurozone. It is no longer a tail risk; we've assigned a 20% probability to Italy leaving the euro."

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