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It is the Fed’s core mission to monitor and maintain inter bank liquidity. ALWAYS HAS BEEN. Look at the number of times the Fed has pumped liquidity into the system since 1971. This is NOT new. https://www.federalreserve.gov/aboutthefed.htm “The fundamental mission of the Federal Reserve...

Dude - as I said before but you choose to gloss over; Repo Rate spikes are NOT an anomaly. They’re not common but they’re not rare either. In fact - it’s been that way since the 1980’s and the advent of the Treasury Bond futures. In fact, bigger basis traders would hedge against them. Basis...

I used to trade the Treasury Basis Spread - and we would occasionally see Repo Rate spikes in the 90’s and early 2000’s before there was a housing crisis or QE. Was not unheard of and easy enough to hedge against.

The Repo market illiquidity issues are entirely of the Fed’s own construction. Over years of QE they took massive amounts of liquidity OUT of the market - and now they’re finally playing catch-up, and only when there was a problem. Plus they’ve been rolling coupons to take advantage of the...

Insane in the membrane.

Well, unless they bought the Puts in October 2018 and sold them late December 2018 that didn’t work out at all.

I trade futures and the OP specified a short SPY position. Nothing wrong with being certain in a post.

And you’re living in a fantasy world if you think that a short position never marks against you - requiring more margin. And in the world of commission-free trades of course brokers are going to try to make a very modest amount of money loaning out customer funds in the Repo market.

I called a broker to check and the answer is no if you keep your open short position. The proceeds of the sale of short stock do not belong to the client and is collateral for the shares lent out to make delivery to the buyer. The clearing firm can and does earn interest on some of those funds...

Call IB or TD Ameritrade and ask. You’ll typically require some amount of cash liquidity to maintain margin for a substantial open position.

AFAIK you would have to close out your short position first and “realize” your profit before you used the entire profit to purchase bonds. I used to keep T-Bills in my futures account - but it comprised one half of my account equity.

Exchange supported spreads are a rather recent development as far as exchange products go - probably about a dozen years old. It’s fantastic in that futures clearing firm risk managers are going to be able to give you the substantial margin discount instantly, and you can properly trade the...

Comprehension. You are merely rewording my statement as an interrogatory. “if they are long some real stars, it’s possible that those names could outperform the S&P 500 Put premium losses in a market rally.”

This past weekend's Hong Kong election has some real dark horse implications if China follows through with their threats. Beijing is pissed and Xi is in a corner. 71.2% voter turnout and all but one pro-Beijing District Council representative was replaced by a pro-democracy representative...

Look at all the fun you can have with Crude Oil and Natural Gas: Crude Oil Intra Market Hedge Ratios and Margin Credits...

If that happens they will be destroying what they have built up since 1992. That economy and their political prestige is pretty much reliant upon exports to socially liberal Democracies. Mexico, India, Indonesia, and Vietnam wouldn't mind it one bit, though. Probably looking forward to it.

I think the safe thing to tell a newb like the OP is that if you stick to a spread combination that is recognized by the exchange and receives SPAN margin credits from the exchange, you don't really have to concern yourself with correlation. The exchange is NOT going to give you a significant...

I have attached links to exchange settlement sheets for Crude Oil and Natural Gas: https://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude_quotes_settlements_futures.html https://www.cmegroup.com/trading/energy/natural-gas/natural-gas_quotes_settlements_futures.html The prompt...

It's too bad that your sincere thread has been hijacked. For intra market spreads (same commodity, different expiries), naturally correlation isn't a real issue. For inter market spreads that are recognized by exchanges for SPAN margin credits, (like Gasoline versus Crude or Two Year Notes...

Hong Kong, ranked at the top of the economic freedom index since 1995 and one of world history's biggest success stories in terms of Democracy and Capitalism being absorbed by the Chinese Communist Party - you just knew this wasn't going to end well.