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Well, there's a whole lot more US cash bonds out there. For example, issue size for the current 10s is $64bn; open interest on Sep 10yr note contract is arnd 1MM; so the ratio is only arnd 1.5 (actually for my previous bund example the ratio is more like 8.5, 'cause I forgot Finanzagentur...

Dude, you're looking at a single specific issue! Of course, a specific cash bond has nowhere near the liquidity of futures. Just think about it this way: current 10y bund (3.5% Jul 19) has a total issue size of EUR13bn; current open interest in Sep9 bund contract is arnd 850k, which gives you...

Agree 100% and it's already happening in the CDS and IRS mkts, as I alluded in another thread... Also, sadly, agree re powers that be. I just hate sloppy, lazy, sensationalist journalism.

I wasn't expressing my opinion of their actions. I was just trying to summarize the likely logic behind their decision.

Apart from blaming all the world's ills on the derivatives mkt, I actually don't completely disagree... This is a post that summarizes my thoughts on the matter exactly: http://www.informationarbitrage.com/2009/08/fixing-wall-street-the-feds-blew-it.html But this has NOTHING to do with...

Calm down, pls... All these numbers remind me of that fantastic TARP estimate of $23.7trn. Complete nonsense. Now, I agree that a bank with $1trn notional exposure is LIKELY to have higher counterparty risk than one that has $1m notional exposure (assuming they are roughly similar banks...

PLS STOP POSTING THIS SENSATIONALIST CRAP! http://www.elitetrader.com/vb/showthread.php?s=&threadid=172200 I am tired of SH!T journalism and of having to keep saying the same thing again and again...

They're just buying protection... Like Goodhart said yest in an interview yesterday, QE is easy to stop and the economy is weak so the insurance value of increasing the program outweighs the potential costs of overdoing it.

I only use BBG, simply because I like the user interface... I also hate Reuters. To me it's the clunkiest thing ever. I occasionally would trade the curve using futures, but it's not ideal, 'cause there's basis risk that you may or may not want to run.

Good point... My apologies for being so inattentive. Still, would be interested to see the blog...

Here's my advice, based on my personal experience... Place yourself in your prospective employer's shoes. The thing they want to see/hear from you is a specific UNIQUE characteristic/feature of your background/character that makes you the absolute best candidate for the job. Then they want...

I have never changed my statements. I have always been saying the same things, but was just trying to approach it from different angles to make my point as clear as can be. At any rate, good luck with your optional endeavors!

You're thinking of it wrong. Let's imagine that there's a tradeable commodity out there and let's call it "optionality". Then think of IV, whichever way it's calculated, as a simple measure of the value mkt assigns to optionality, much like yield is a measure of value the mkt assigns to bonds...

As I mentioned in the other thread, I am with dmo here... IV is just a convenient measure of the price of the option. For instance, in the fx options mkt, options are most often quoted using vols, rather than actual prices. And, JJacks, you can't compare apples and oranges. Your...

The wonders of base effects never cease...

I am pretty sure we're talking about the same thing, but maybe dmo is the best person to speak to that. We don't NEED IV for options. We choose to use IV for options, sorta like we choose to use yields for bonds. It's convenient. [B] Well, I don't know what to say to that. I am hurt. I...

OKI, I am truly happy that we have cleared this one up... As to your other point, I am now totally lost, as it seems to have nothing to do with our original discussion. What does 'average retail guy' have to do with anything? Moreover, how can "the same" conclusion apply to things like...

Actually, how about a simple illustration of how fallacious the author's logic is? Let's use a simple derivative, a short-term interest rate (STIR) future, e.g. eurodollar. Currently, the Sep9 Eurodollar contract open interest stands at arnd 1mn. A single Eurodollar contract notional value...

Yes, I have read it... Don't you think the authors of this piece are being just a wee bit disingenuous? They put the huge number in the title and then the explanation of the notional issue in a sort of an aside... Moreover, the whole "conservative" 1% of the notional actually being at...

DMO is exactly right... Ideally, all option pricing models are based on arbitrage pricing (replication, etc). Arbitrage pricing has flaws, as lots of assumptions need to hold for things to work. What dmo is saying is that ultimately everything is about equilibrium pricing and IV is a...