Hedging Bonds

[AlphaGeneration]

I'm looking to buy the following bonds through ETFs (that don't have options). How can I hedge against declines in these bonds (independently)...by only using other ETFs/stocks, options (so no credit default stuff, etc...)

-Junk bonds
-US Investment grade bonds
-Global bonds
-US Long Term Bonds

Can this be done by shorting gold?

 

[Martinghoul]

You don't ask for much, do ya?

 

[wave]

For Munis:

Market Vectors Short Municipal

http://etfdb.com/etf/SMB/

Collapse of the Municipal Bond Market around the corner?

Folks thought 2008-2009 was bad. Wait till you see what's around the corner.

 

[dhpar]

the only way to hedge against decline in these bonds is to sell them.

 

[nazzdack]

Quote from AlphaGeneration:
.....ETFs.....

-Junk bonds
-US Investment grade bonds
-Global bonds
-US Long Term Bonds

Can this be done by shorting gold?

1) iShares.com------> click on "Fixed Income" for ticker symbols.
2) You can hedge treasury securities with note/bond futures and options if your ETF position is large enough.
3) The bond market's correlation to gold isn't consistent nor coherent enough for "hedging".

 

[wave]

A correlation analysis will help as well.

 

[dhpar]

Quote from wave:

A correlation analysis will help as well.

that's the way to hell - i am sure you meant it only as an academic exercise...

 

[wave]

Quote from dhpar:

that's the way to hell - i am sure you meant it only as an academic exercise...

I agree it is, unless one has it all automated.

 

[wave]

President Obama's state-of-the-union message about federal and state discretionary spending could be the catalyst/trigger to short the muni bond market.

Borrowing to Build vs. Borrowing to Pay a Deficit. Hmm, like Cali, just postponing the inevitable but with more debt.