Making money off the coming Dutch election on March 15, 2017

The Netherlands will have general elections on the 15th of March, 2017. A total of 150 parliamentary seats will be divided between different parties. The outcome of this election will be crucial for the European Union, as the Netherlands is a very important member and one of the larger net contributors.

The party that is currently leading in the polls and has been for months openly states that a Nexit(=Dutch exit from the EU) is part of their platform. Polls show the majority of Dutch people would support such a referendum and would vote in support of a Nexit.

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The coming election can provide an opportunity for traders to make money by placing bets on cryptocurrency and forex, and in this article I will show how. But first, some more background information...

A total of 28 different political parties are participating in this election, but over half of them have no chance of being elected into parliament. Below is an overview of the majority of parties that do have a chance of being elected. If you want to skip this part, scroll down to "Election Results".

Political Parties

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PVV - Party For Freedom

• The largest party in the polls, leading with 27 seats.
• Party leader: Geert Wilders
• Aspects: anti-Euro/EU, pro-Trump, pro-EFTA, anti-Islam, anti-refugee programs, supports lower taxation
• Ideology: populism, nationalism

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VVD - Peoples Party for Freedom and Democracy

• Second largest party in the polls, with 26 seats.
• Leader: Mark Rutte (Current Prime Minister of the Netherlands)
• Aspects: austerity, privatization, deregulation, pro-EU, lower taxation, part of current cabinet
• Ideology: center-right politics, liberalism

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CDA - Christian Democratic Appeal

• Third largest party in the polls, with 18 seats.
• Leader: Sybrand van Haersma Buma
• Aspects: moderate on most issues, pro-EU
• Ideology: centrism, christian-democracy

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D66 - Democrats 66

• Fourth largest party in the polls, 17 seats
• Leader: Alexander Pechtold
• Aspects: very pro-EU party, supports an EU-federation
• Ideology: progressive liberalism, social liberalism, globalism

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GL - GreenLeft

• Fifth largest party in the polls, 14 seats
• Leader: Jesse Klaver
• Aspects: pro-EU, pro-refugee programs, higher taxation, renewable energy
• Ideology: environmentalism, eco-politics (this party was grown out of a Maoist/communist movement from the 70s/80s)

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PvdA - Labour Party

• Sixth largest party in the polls, 11 seats
• Leader: Lodewijk Asscher
• Aspects: pro-EU, pro-welfare state, higher taxation, part of current cabinet
• Ideology: social democracy

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SP - Socialist Party

• Seventh largest party in the polls, 10 seats
• Leader: Emile Roemer
• Aspects: pro-welfare state, anti-austerity, neutral-to-skeptic opinion of the EU, higher taxation.
• Ideology: socialism, social democracy (In the 70/80s, this was an openly marxist/communist party)

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Election Results

After the election results, the formation of the cabinet takes place. A cabinet-coalition needs to have more than 75 seats in the House of Representatives. It has never happened in Dutch parliamentary history that a single party acquired enough seats to have an absolute majority in the House of Representatives. Cabinets are always formed between a coalition of the largest parties. Almost all major political parties have publicly stated they will not form a cabinet with Geert Wilders / the PVV. It will be interesting to see what will happen after the election results come in. Will some parties take back their statements and form a coalition with the PVV? If a majority coalition between parties cannot be formed, new elections will have to take place.

Making Money With Forex

Either way, if the PVV does become the largest party, the initial shock, and as a result - a potential Nexit - could create enough uncertainty in the international sphere and chaos for the time being to make the Euro fall in value.

If a person wants to bet on this, it's possible by creating an account at a Forex broker and placing a leveraged short on the EUR/USD currency pair. A short is a bet that the price of the instrument will go down. Of course, it's also possible to go long and bet that the price of the Euro will rise, in case the PVV does not become the largest party and the fear of a Nexit will be non-existent.

For example, lets say somebody opens a short position of €1000 and uses 50x leverage on this, thus increasing his/her position by 50 times (=€50000), while only needing €1000 of margin to open this position. If the Euro would drop 2% in value due to the outcome of the election, this person would make 2% of €50000, thus doubling his or her money and making €1000. A larger drop in value of the Euro would of course increase the profits. It's also possible to use higher leverage and more margin to increase the potential profit, but than the potential loss will be greater if the market goes in the opposite direction of the bet (long or short). It's important that the person sets an adequate stop-loss that doesn't exceed the initial margin used, and is adjusted to the amount he or she is willing to lose.

Making Money With Crypto

Another way to potentially profit from a PVV / Geert Wilders win during the election is to buy some of the cryptocurrency called Gulden. Gulden is also the name of the national currency which the Netherlands used before the introduction of the Euro. Getting out of the Eurozone and going back to using the Gulden as a national currency is part of the PVV platform. This amateur, crypto-variant - although in no way affiliated with a real government-backed Gulden - could rise in price if the PVV were to become the largest party due to the connection of semantics. Of course this is purely speculation. More can be read on the Gulden cryptocurrency here. Interestingly, various shops and taxi-services in the Netherlands have accepted payment of the Gulden cryptocurrency and new Dutch (web)shops continue to add it.

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The above references are an opinion and is for information purposes only. It is not, and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action. Trade at your own risk.

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For more information, I recommend the following websites:

To follow the current polls:

• http://www.ipsos-nederland.nl/ipsos-politieke-barometer/barometer-van-deze-week

To read a tutorial on forex-currency trading:

• http://www.investopedia.com/university/forexmarket/

To inform yourself more on our elections:

• http://finance.yahoo.com/news/could-nexit-brexit-dutch-elections-112806988.html
• https://en.wikipedia.org/wiki/Dutch_general_election,_2017
• https://en.wikipedia.org/wiki/Dutch_withdrawal_from_the_European_Union

View Gulden (NLG) on coinmarketcap:

• https://coinmarketcap.com/currencies/gulden/