What would you say if I told I know of an investment which will return 10-15%+ over the next 12-18 months with just slightly more than treasury risk? Any true market bears should be all over this.
REgardless of your outlook there’s always room for something like this. What is it? some covered option trade?
Covered options don’t have treasury risk. This has true treasury risk.
ok… what is treasury risk? gov’t default?
straddle??
hey widestance, I’ll bet you like to straddle… airport restroom toilets!
^good one!!
Pretty much. Somewhat higher than that. At least AAA corporate.
ok, when you’re finished w/ 20 questions let us know
Guess we have no true bears here.
i said iwould buy some
I’ll buy. WTF are you referring to? 
sounds like an infomercial.
But wait! There’s more…
You can have your pick of SPACs right now which will yield 10% to worst. You’re essentially buying a closed end fund consisting of very short term Treasuries at a 8-10% discount to NAV. There’s also a very obvious explanation why this discrepancy exists: these were widely owned by hedge funds which are liquidating them as fast as possible. Here’s a list: http://www.morganjoseph.com/i/SPACMarketUpdate.pdf Advice: Stick with SPACs underwritten buy bulge bracket firms (should have $10 intial offer price) trading on the AMEX. You’re welcome.
If the deal doesn’t happen you get your 10% but sometimes the larger spac holders squeeze the management (that will do anything to get the deal done) at the expense of the other shareholders. I think this could be a lot riskier than treasuries.
Doesn’t matter. You can redeem for the trust value. Large shareholders can squeeze management but they can’t squeeze the trust.
my first response to any “sure thing” with expected returns substantially above the EF is a great deal of suspicion. remember all the risk is dead articles…yeah right. problem is VIX has options priced very high. hard to make those nums work without substantially more than “treasury risk” (whatever that means anymore).
Fair enough, but there is a pretty obvious explanation as to why this anomaly exists. I don’t know what the VIX and options have to do with this. I’m talking about buying the common and waiting to redeem for cash. No warrants involved, although I bet you can decently enhance the yield doing a little unit/common/warrant arb.
But if those deals actually happen you could lose?