L
Lance Carson
Ask me when it gets to the target- 110-00 (ZBU6)
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Bond rally nearing an end?
- Thread starter gharghur2
- Start date
As if PIMCO hasn't sold enough strangles they added another 20,000 to the total today at 17 ticks. Really the only traders doing anything meaningful today, light volume pop early, then nothing rest of the day besides that strangle around Noon. Wouldn't read too much into today's action.
Quote from mcurto:
As if PIMCO hasn't sold enough strangles they added another 20,000 to the total today at 17 ticks. Really the only traders doing anything meaningful today, light volume pop early, then nothing rest of the day besides that strangle around Noon. Wouldn't read too much into today's action.
It's as if Bill Gross was told that one cannot buy, only sell premium. Proif that the guy isn't comfortable with his trading. How many FI managers pull a Leeson every month. Ridiculous.
Quote from mcurto:
If you want to play the curve inversion I would be short the 2yr vs. long the 5yr or long the 10yr (not the 30yr). The current trade a few dealers have on is the 2/5/30yr fly, short the wings and long the body. Reason being is they expect the belly to outperform on the upside as it was the leader on the downside move to the years high yields. Thus, you get more bang for your buck being short the front of that fly, versus long something in the belly (5yr or 10yr). If real money begins jumping onto this bull move as of late in huge size the belly will strong outperform the wings (since they mostly concentrate in those maturities).
mcurto, risk-dude,
What is the standard ratio for the 2/5/30 fly mentioned above?
Thanks in advance.
Meanwhile, this from Marc Faber's June 5 note:
"My readers will know from previous reports that I am ultra bearish about
US bonds for the long term. In fact, I recommend that each reader buy just
one 30-Year US government bond, frame it and put it on his wall in his
living room. You can then, in future, show your grandchildren how the US
dollar and bonds became worthless. However, for the short term, I believe
that the out-performance of equities compared to bonds, since 2003, has
ended and that bonds will now rebound over the next three months (see figure 5). I may add that bond bullish sentiment reach recently extremely low levels while commercial had record long bond positions â a powerful contrary indictor, which would support my take that the US economy will shortly badly disappoint."
http://www.gloomboomdoom.com/marketcoms/mcdownloads/060605.pdf
*Note his May letter was spot on re: commodity and equity sell-off, accompanied by a rally in bonds/notes.
"My readers will know from previous reports that I am ultra bearish about
US bonds for the long term. In fact, I recommend that each reader buy just
one 30-Year US government bond, frame it and put it on his wall in his
living room. You can then, in future, show your grandchildren how the US
dollar and bonds became worthless. However, for the short term, I believe
that the out-performance of equities compared to bonds, since 2003, has
ended and that bonds will now rebound over the next three months (see figure 5). I may add that bond bullish sentiment reach recently extremely low levels while commercial had record long bond positions â a powerful contrary indictor, which would support my take that the US economy will shortly badly disappoint."
http://www.gloomboomdoom.com/marketcoms/mcdownloads/060605.pdf
*Note his May letter was spot on re: commodity and equity sell-off, accompanied by a rally in bonds/notes.
faber spot-on u must be joking... he is weeks behind the curve (months actually, but no $-bear will ever want to even consider the possibility...), so ultra-bearish he is probably on prozac now having to accept the realities of rates going up and how money's moving away from his babies... http://www.elitetrader.com/vb/showthread.php?s=&threadid=70454 what a joke!
Quote from 2cents:
faber spot-on u must be joking... he is weeks behind the curve (months actually, but no $-bear will ever want to even consider the possibility...), so ultra-bearish he is probably on prozac now having to accept the realities of rates going up and how money's moving away from his babies... http://www.elitetrader.com/vb/showthread.php?s=&threadid=70454 what a joke!
I stand by my statement "*Note his May letter was spot on re: commodity and equity sell-off, accompanied by a rally in bonds/notes."
I would respond to your USD comment but it is off topic - see the thread title.
BlueHoreshoe,
For the 2/5/30 yr fly you are essentially looking at it as two separate yield curve trades. The 2/5 or TUF spread weighting is normally 100:90 and the 5/30 or FOB spread weighting is almost always 250:100. Thus, if you are looking to do this spread the optimum ratio would be 100:340:100 or at its smallest unit 5:17:5. The futures spread is kind of a proxy for a cash belly vs. wings play.
For the 2/5/30 yr fly you are essentially looking at it as two separate yield curve trades. The 2/5 or TUF spread weighting is normally 100:90 and the 5/30 or FOB spread weighting is almost always 250:100. Thus, if you are looking to do this spread the optimum ratio would be 100:340:100 or at its smallest unit 5:17:5. The futures spread is kind of a proxy for a cash belly vs. wings play.