Congrats JDV… I put this trade on a couple of months ago too, so lets hope we can cover the carry on the commodity leg…
If I ever considered a trade like this again…I’d go long silver and zirconia instead…
That’s great, Joey… I couldn’t figure it out for a while… me being such the straight man and all that…
To the good man that was inquiring about the economics of these long-term swaps: basically, just like in any other financial deal, you are trying to scr*w the counterparty.
Yes, I definitely urge caution when it comes to these types of long term risky investments. That is not to say that I completely discourage folks from taking on an investment like this, but for me, I doubt ill ever do it again. They can work out for some. Like any rookie trader, I didn’t trade out of my position and cut my losses when my thesis went awry. I watched and waited as value trickled away while I was paralyzed by emotion and I didn’t set a stop. Instead, I added a couple derivitives…these are definitely exotic, as they never lose any intrinsic nor time value over their life. Its a bit of a unique situation though as these types of alternative investments usually are…as long as I hold the underlying liability the derivitives are stable but if I were now to try and unwind my position in the underlying, the temporary volatility in the derivitives can be quite. unpredictable. I’ve also been notified by an experienced advisor that selling this investment now obligates me to a long term annuity payment to the counterparty of the initial investment. I’m kind of stuck, and chaulk it up as a lesson learned. I suggest a thorough analysis and risk assessment be made prior to engaging in any of these types of investments and be sure to include a sound exit strategy. Good luck.
Congrats dude.
good post & congrats - i admit that i had to read this twice! will be in the same position next year. All the best.
So are pork bellies looking bullish? (no disrespect intended…)
Grats joey, glad you’ve found your special someone…
Hey Joey… Congrats! Prediction: Within a month after the trade closes you will hear the phrase… “Jeez!!! Are logged onto analystforum AGAIN!!!”
Well done! I hope this doesn’t distract you too much before Dec!