a prop trader's "lay-up" (tm) (c)

A

andrasnm

if you have access to some $$$ and a decent rate (like echo)
I have a "lay-up" for you. (lay-up = sure thing)
Try to trade bond funds - scalp them half on a short side
half on the long try to make 2-3 cents. You won't make much
but won't lose much either. The key is the premium and discount
of these funds. You must play god and separate the herd. The
discount/premium is not always right, but some are clearly weaker some are great !!!!
As I said this is low risk and pretty sure. Even if you fuck up
and it goes against you for a 1/8 you can wait it out.
Must have 500k or more available and very low rate.
We used to make 50k-80k a months and since decimalization we abandoned this but you can make much smaller but better than
McDonnalds ? The best secret - your overhead is paid from the
dividents these pay monthly alone!!!

BTW if you lose it's only money if you make send me my royalty
 
andrasnm

sounds interesting, where can I find info about- trading bond funds -? any URL ?

thanx for sharing

eli
 
ETF's are listed in barrons as discount/premium ,also the yield.
some a liquid some are so-so. spread now is tight and it trades
when old ladies make their move. The discount/premium to
par(asset worth) is just a guide-line. We were trading these
and the only problem was if you were too long or too short
when bonds moved big. Hence my neutral strategy. There are
specialist for all of these (ETF's trade at the NYSE)
In the good(old days) the spread was teenies or eights :mad:

Info is sparse no web-site there are some books as it's booring
as 'cat-shit' - no bigmoves just small profits. I even play these
just not as a scalp. There are literary hundreds of these so
if you are patient and the specialist is decent = $
 
if you are long/short in equal size and yld% you will make nothing in dividends.you will collect long side/owe short side.Once again the free lunch disappears.
The nasdaq site lists etfs but mostly equity funds for foreign exchanges,hong kong-swiss-mexico etc
 
Good point and good eyes.
you vary your strategy and if you are good and you are right -
make more. The danger is if you net long 500k and bonds go
against you. you can have a 70:30 biast on the long side if
bonds are favored. There is a some default risk as some of these
ETF are junk or bit above junk rate. I rather eat the dividents
now as junk seems a bit risky. Many companies you never
think of are on the brink of the abyss (i.e. lucent)
I mean risk/reward may not be there anymore.(it's a call
you make ) Clearly this was kept as a secret before decimalization. Just that we had run into rate and fund problems before - ironically these are not the concern anymore. Had there be no decimalization I would quit my project and head to Echo in a NY minute.
 
if (IF) you can make consistent 2-3 cents on volume it's can work.
you will be the hero of the firms as you will "produce" commission.
I would rather do this where there is a rebate along with 1c or
less vig. (firm - may not exist ??????)
My point - you are truly using the prop firm for what it's worth;
providing capital and structure. For this you need $$$$ not like
everybody can do it.
But I understand your scepticism and I don't suggest anyone
doing it unless you have no other ways of making money in
the markets.
 
You must log in or register to reply here.
Back
Top