Who are the idiots buying bonds for 1% interest?

Oh, I understood the options nonsense - except for the parts where you made rather gross errors in trying to explain what you were doing.

Stick around, though - this thread needs a money losing clown and you fit the bill.
 
kids stop fighting.

the thread is interesting. the bonds are weird. please keep the fruitful discussion going for the benefit of the naive like myself.

Grandpa Shortie Out :cool:
 
Oh, come now, there go the mean-spirited personal attacks again.

Don't get bitter, get better.

Your wish will come true if I do nothing to my position and the Dec Ten Year rallies past 133 or, between now and the Sept. futures expiry, alternately crashes through 115.

Wow, those Twos are crazy movers!
 
Not just Citibank, but EVERY bank in the world, to support the USD from total collapse and driving the world economy into...you know. It's a shell game. That's why the equity markets are dead. Until the USD stabilises to where the trade deficit with China and the yuan is at zero or an acceptable" level, interest rates must stay low or the entire house of cards collapses in on itself.

There is no such thing as money any more. It's all just numbers in the computer now.

Quote from achilles28:

Banks.
 
Admittedly I have not read past the first two pages of this thread


Why go to bonds – a redneck’s economics 101


Bonds and the physicals (Gold / Silver) are the last bastions of hope

People (or countries) move to Bonds;

To finance more spending

Because they believe that country’s currency is going to shit

ie = For protection...

US is buying bonds to monetize the debt – which evidently then they’re planning to turn around and prop up the market with the “money” raised… (please have a think on why I placed money in quotations)

Other countries (China) are buying bonds because they think the dollar will turn worthless


Bonds fail – the US fails….

Here’s a couple of links

http://en.wikipedia.org/wiki/Monetization


http://en.wikipedia.org/wiki/Government_bond


http://en.wikipedia.org/wiki/Foreign_exchange_reserves_of_the_People's_Republic_of_China



I said it before – we need some significant manufacturing to pull us out, and obviously some spending cuts…


Other than war – the only thing that’s pulled us out in the past is housing – which is now kaput

There’s an old saying – “May you live in interesting times” – We are my friends… We are

Happy Weekend
RN
 
Quote from bone:

Ah, the two village idiots again. Welcome to the world of fixed income with its charming syntax. Basis is one thing with 'clean' and 'dirty' prices but options are on another level entirely. If I had said "out of moneyness" instead of "beyond the money" it would still have meant no difference to you.

Whatever you do, never pick up a phone and call a bond future options desk on the floor of the Board for an iron fly quote or a dealer in Houston for an LN strangle quote. Not a retail guy in Delhi - a floor operations desk. Hell, you wouldn't even know how to quote the strikes on an options spread.

I'm bullish rates in May, but I'm unsure of time horizon (that's theta) and want some downside protection so I buy a Ten Year Bull Call Spread 18 tics out of the money (to simplify for you, after 18 tics the front strike in the vertical spread [you know, the long one] is known to be in the money ITM). It was great timing, because June was pretty close and I could get Sept without going to the Flex market, but I digress. (go ahead, quickly Google the flex market) Long story short, we rally through both strikes (again, to simplify for you, the second strike in the vertical spread is the short call position which we sell to limit our downside risk and minimize the theta (thats time) component. Did I mention that the first strike is the long call leg that's deep in the money by now? OK, so, well, we keep rallying!! But you know what? My position doesnt earn any more money as it continues to rally past the second vertical strike (the short leg) - no more moneyness. beyond money. yep, that's what its called. it can rally to the moon and it keeps a very slight net positive delta but never keeps its value. What do I do with that slight positive net delta? I do what we call a horizontal spread - I sell a higher strike in the Dec contract, but since that strike price is still a few points higher, in the business we call that out of the money, or OTM. Using the profit from the Sept. bull call spread I sell enough Dec 130 deltas to cover the slight delta risk and gain the vega (thats the volatility part, google it real quick) and theta (we talked about that, that's the time premium component). As a side note the timing for the Dec 130's is great because the premium three months out is really fat, but again, I digress and confuse the two idiots again).


Others may have picked your pockets, and you do not even seem to realize it. Talk about options expertise! Here is the hint. Instead of the call spreads, redo the same thing with puts-- you might be able to realize what you lost. If you do not realize it then they deserve what they picked from your pockets with your own hands. Bravo in the area of knowledge does not work.
 
Quote from The Big D:

Option nonsense aside, the move continues as predicted. Sort term the target is 109'160. Depending on how we get there that might move.

I'm not surprised to see the Sep/Dec spread has expanded to more reasonable values. That's fine - as others pointed out, it is possible for those with the capital to take delivery to arbitrage the situation, and it had to happen eventually. That's the reason I didn't go long the spread despite the fact that it was trending nicely. The whole point was simply that it was an indicator of who held what positions.

Now every speculative long entered for the last two weeks is under water. And I don't see any evidence of funds buying - they still appear to be reducing exposure. Going down...

Do you think that his strategy is to insult others so that there are more posts, and therefore more potential exposure for his things? If so, he picked the wrong people this time, as the readers should be able to easily make their conclusion about what he knows and what he does not, assuming the former is not empty and the latter is not what his leads already know.
 
Quote from tradingjournals:

Do you think that his strategy is to insult others so that there are more posts, and therefore more potential exposure for his things?

Probably. And truth be told, it could be a very effective strategy. His obvious target market is new traders who don't know what a spread is. So even though all the ones that saw him fall flat on his face in this thread are poisoned, there will be a new crop next month. If he'd gotten lucky and the market moved his direction, his belligerence might have been mistaken for real expertise and he might have sold a course to someone.

It seems like a sort of variant on the old scam of taking 1024 marks, and then mailing them stock predictions 1 a week for 10 weeks. Each mark gets a different series of bull and bear predictions so that at the end of the 10 weeks there's guaranteed to be over 50 marks where your predictions went 8-2 or better. Then you sell your snake oil just to them.

The only difference is that in this case, the marks are spread out over time rather than targeted in parallel. But the concept is the same.
 
TJ: If you have no clue that being net short Dec. 130 Calls is identical to the 'puts' you describe then you have no business posting about options.

Little D: Speculating on Interest Rate flat price direction with Two Year Notes is akin to making a porno with a Two Inch Dick. I gained 0.82% on the settle and you gained 0.08%. That's an order of magnitude unless of course you're going to argue that one as well.
 
Watching your public persona break down into an ever more childish loser - the real you - as this thread goes on and the market moves against you is very entertaining. By all means continue :D
 
Back
Top