What a beautiful 3yr note auction today
- Thread starter EqtTrdr
- Start date
Bernard, the deadline for bidding at the auctions is noon CST. The note/bond to be auctioned started to trade in the when issued market the day it was announced. There is an active market for it, on a WI basis, up and into the auction.
So, you look to see where the bid yield is on the when issued note at the noon deadline (need a cash screen, Reuters or BBG) and compare to the actual yield that the auction gets done at when the results come out around 12:02.
If the yield comes in above the noon WI (prices below) the auction might have struggled depending on the size of the tail The inverse is true if yields come in low. I compile the history so i have a basis for comparison.
When the auction yield hits the tape, dealers and other traders know whether they have been filled or not on their orders. If they did not bid aggressively (put in bids at a high yield) and they got filled, the auction probably did not go well and dealers got stuck with paper they probably don't want.
Probably an over simplification but thats it in a nutshell
So, you look to see where the bid yield is on the when issued note at the noon deadline (need a cash screen, Reuters or BBG) and compare to the actual yield that the auction gets done at when the results come out around 12:02.
If the yield comes in above the noon WI (prices below) the auction might have struggled depending on the size of the tail The inverse is true if yields come in low. I compile the history so i have a basis for comparison.
When the auction yield hits the tape, dealers and other traders know whether they have been filled or not on their orders. If they did not bid aggressively (put in bids at a high yield) and they got filled, the auction probably did not go well and dealers got stuck with paper they probably don't want.
Probably an over simplification but thats it in a nutshell
rhymeswithorang,
Thanks for your explanation.
Do you mean essentially the difference of bid yield on those 2 minutes between the 1200 CST and the 1202 or so when the WI yield results are known?
If so how can it be meaninful that difference? -- I don't think the dealer would bid only the last minute (1159CST) up noon deadline for the full position he needs... am I missing something?
http://www.marketwatch.com/News/Sto...B4E-409D-BCCC-F58A87BF46C2}&siteid=mktw&dist=
"Thursday's 30-year bond auction attracted a very high 65.4% indirect bid, a category that includes foreign central banks, indicating that foreign demand remains boisterous"
"Thursday's 30-year bond auction attracted a very high 65.4% indirect bid, a category that includes foreign central banks, indicating that foreign demand remains boisterous"
I have what might seem a dumb question.
If you want to buy a home and finance it, why not just short the 30 yr bond at 4.5% and use the money to pay for the home.
If you have other securities in you margin account, couldn't you withdraw the short credit? I mean, you aren't really margining anything--right? wrong?
I talked to two firms that both said the margin credit had to remain in the account. Ideas?
If you want to buy a home and finance it, why not just short the 30 yr bond at 4.5% and use the money to pay for the home.
If you have other securities in you margin account, couldn't you withdraw the short credit? I mean, you aren't really margining anything--right? wrong?
I talked to two firms that both said the margin credit had to remain in the account. Ideas?