when do you guys start to short these bad boys??
At the top. Can you stop with these stupid posts now?
yeah, honestly. isn’t your TBT, TLT post the exact same thing? and it is right under this post.
when I look at long bond futures they don’t seem like the same sort of risk that I’d like to take… I just want to short 30 year treasuries, hold the short forever… kind of like a loan. Futures don’t do this. Maybe I need a swap? Are there any little (sub $100k) exchange traded swaps where I pay the returns of the long bond in exchange for the returns of cash?
I don’t know, I’m definitely with NakedPuts on this one. You need to short these sort of instruments when they are at the top, it is the only way you’ll maximize your returns.
KJH Wrote: ------------------------------------------------------- > when I look at long bond futures they don’t seem > like the same sort of risk that I’d like to > take… I just want to short 30 year treasuries, > hold the short forever… kind of like a loan. > Futures don’t do this. Maybe I need a swap? Are > there any little (sub $100k) exchange traded > swaps where I pay the returns of the long bond in > exchange for the returns of cash? long 50% of your exposure in TBT.
Remember that if you short, you’ll be paying out interest while you’re waiting for rates to go up.
ConvertArb…That’s a theoretically correct answer but I don’t trust that if I do that trade, 50% in TBT and 50% in cash, I’d have the same pile of money after 30 years that I would if I could just short a 30 year treasury and put the proceeds in cash.
NakedPuts Wrote: ------------------------------------------------------- > At the top. Can you stop with these stupid posts > now? I’ll stop with my posts when you stop with your stupid answers. Nobody can predict the top you asinine fool.
KJH Wrote: ------------------------------------------------------- > ConvertArb…That’s a theoretically correct answer > but I don’t trust that if I do that trade, 50% in > TBT and 50% in cash, I’d have the same pile of > money after 30 years that I would if I could just > short a 30 year treasury and put the proceeds in > cash. KJH - If you short a Treasury, you pay the repo rate to borrow the bond. Nobody is going to let you do a trade where you are the US govt borrowing money at 3% for 30 years. You will also have all the credit restrictions that are part of the futures contract.
Reggie Wrote: ------------------------------------------------------- > You need to short these sort of > instruments when they are at the top, it is the > only way you’ll maximize your returns. I propose a permanent moratorium on AF on statements like “You maximize your returns if you short at the top”
I see now that if I wanted to borrow at the risk-free I couldn’t simply short sell treasuries because I would have to pay a borrow fee or repo. Of course there is an advantage of borrowing at the risk-free when I don’t have a triple AAA rating, but I was wondering if there is an advantage to loaning at the risk-free when you are in fact a riskier institution?
Loaning at the risk-free rate is just buying T-bills. I guess I don’t know what you mean by advantage, but there are all kinds of good reasons for buying T-bills. Mostly you buy T-bills because you think that the money market is a risky place or you have tax issues. You can also use T-bills as collateral more easily than you can money market instruments.
Okay, I think I was looking too deep into this. The terms on which I loan money have nothing to do with my credit rating only the borrowers.