KJH Wrote: ------------------------------------------------------- > Can someone look at the long bond futures and tell > me how that would work as opposed to shorting TLT > (which is unavailable for short)? USH9 is the current Long Bond Future trading at 135 20/36… you can sell this for delivery on 3/2/08. if you don’t want to deliver an eligble bond, you can close out this future by longing it before delivery. if you close out the future before deilvery for a higher price you win, otherwise you lose.
Can someone outline how TIP would fit in to augment this strategy since I’m relatively new to this?
If you could short a specific 10 year treasury against a specific 10 year tip then that would be a good move, the only problem is that is hard to do. Shorting TIP vs. TLT (the ishares) is a much different situation.
KJH, how could you explain the differences? Are they largely due to the looseness of the relationship to one another?
You can’t trade TIP ishare like a regular tip because it includes a lot of individual tip bonds that have been marked up to reflect past inflation. If, over time, there is deflation… they will get marked back down. If you buy an individual tip bond, you can buy one that is trading at or below par, thus will not be sensitive to deflation (yet will have all the inflation protection).
Isn’t the majority of the above discussion banking on inflationary outlook and currency devaluation, just to check my understanding?
Black Swan Wrote: ------------------------------------------------------- > Isn’t the majority of the above discussion banking > on inflationary outlook and currency devaluation, > just to check my understanding? inflation FX devaluation US default probability rising…
why can’t you find shares to borrow?