How can I trade corporate debt?

[lescor]

I want to trade corporate debt, the kind of stuff that is generally only available to institutions. I don't have a million dollars to set up my own prime broker account.

Can any kind of firm that already has access to these markets, maybe a prop firm or hedge fund, somehow facilitate me? I want to build a book of a few million dollars, so I need some leverage. I can put up some cash, $50-100k. All my trading is very low risk arbitrage.

I'm in the fact-finding stage at this point and want to know what kind of arrangements might be possible. I'm open to other suggestions too.

Thx,
Corey

 

[mind]

i think you are entering a very interesting field but IMHO you will find it hard at this point of time to build a diversified portfolio. in principle you can access this market from the corporate bond side or from credit default swaps. the latter will be difficult for private acces but why not look for a fund in that area?

i am engaged in the pricing and buying of structured finance products like cdos and things of that kind. these structures are currently finding their way to funds open to the public.

you might find it useful to check out this forum www.wilmott.com, since there are many fixed income people. though the forum as such is pretty techie, it might be another good place to ask your question.

i am not sure if the timing to get into this market is very good. at the moment this field struggles with quite low spreads, which means that you currently get relatively little compensation for your risk, which basically has not changed too much. of course there is always oppportunity in distressed issues, but i did not have the feeling this was your initial intention. spreads correlate a lot with equity volatility and it might make sense to build a portfolio when vola is a little higher than it is now. or at least buy on vola spikes.

sorry i can't really help you with your prime question.


peace