Looking for ideas to put this trade on

R

RichardNixon

Hugh Hendry said something like:

I get paid money every day underwriting the risk that the BOE will cut rates further. I use that to cheapen an option which say "I don't think the Bank of England, and ECB, is going to raise rates in the next 4 months." And if nothing happens i make 5 times my money. If they raise rates, I lose my premium. My premium is not a lot. I'll survive that.
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How can I put a similar trade on?

How can I put a similar trade on for the US instead of UK?
 
I remember we used to have a saying about ole "Tricky Dicky". It went like this......

"Stick the dick to Dick before Dick sticks the dick to you"

1970's :)
 
You'll have a long journey till you get there but the idea is to play on the Eurodollar futures contract (ED).
Start by understanding the product itself.
Remember that there is a credit component in the price.
Then study option combos like put spreads and call spreads.
And the cherry on top is to get a clue of what the bank is going to do, hike or not. For that you'll need all your macroeconomics ammo and read a lot of stuff.
I'ts doable but you'll need practice and a lot of dedication to achieve that. Aint no free lunch. It's a style of trading and it's up to you to see if it's your style. Not mine.
 
Thanks for your reply.

The reason I'm asking is because I want to learn. I'm not going to run out and trade this without understanding.

I know most of the normal option setups and I have traded them in the past on indices and equities.

What I'm most interested in are the various vehicles I can use to trade something like this.

Unless I'm miss-reading Hendry I'm thinking something like this:

The idea is that lots of people talk about inflation and expect interest rates to rise. How do I take their money? Through which vehicles?

Then I want to bet that interest rates will not rise. Which vehicle?
 
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