Anybody else short US 30 Bond

Discussion in 'Financial Futures' started by richard_m, Dec 18, 2007.

  1. elisab

    elisab

    Why are you saying that the price is meaningless?!? The real yield is almost null, but with this tool, the purchasing power is not eroded. I hope in a further fall to increase my position.
     
    #2481     Jul 28, 2013
  2. Sergio77

    Sergio77

    BUt opportunity to trade something else more profitable is eroded. Besides if inflation starts going down again these will lose money.
     
    #2482     Jul 28, 2013
  3. Because nobody who trades cash bonds, incl TIPS, uses prices. It's a meaningless number that conveys no information (one simple reason is the pull-to-par effect).

    As to purchasing power, of course it's eroded. If you buy TIPS outright, you're not long inflation. You're long real yield, which is a very different thing indeed.
     
    #2483     Jul 28, 2013
  4. elisab

    elisab

    The 4% on the Tbond is closer, and this is going to be the sell signal of the equità.
     
    #2484     Aug 2, 2013
  5. elisab

    elisab

    I’m sorry, but I do not understand. When you buy a bond below 100, you get a sure capital gain on redemption. Then the bond revalues itself each year at the rate of inflation: isn’t it a great protection of purchasing power?
     
    #2485     Aug 3, 2013
  6. elisab

    elisab

    The Fed will not let the inflation fall and then the floater part of the bond is only going to be revalued.
     
    #2486     Aug 3, 2013
  7. Not exactly, because your sure capital gains on redemption have to be discounted. Moreover, a TIPS doesn't really "revalue itself". It just pays you a coupon calculated using a notional that is multiplied by a measure of how much inflation has been accrued (index ratio).

    The point is that a TIPS trading at a price of X already implies a certain average annual inflation rate over the life of the bond. if the actual inflation you end up experiencing is lower than what was implied when you bought the bond, you will lose money (incl opportunity cost).
     
    #2487     Aug 3, 2013
  8. elisab

    elisab

    Bullish engulfing pattern yesterday on 30 years US yields. Is it the decisive movement for area 4%?
     
    #2488     Aug 13, 2013
  9. elisab

    elisab

    Strong sells of bond but the 30years yields are close to 4%....is it a great chance for the contrarians?
     
    #2489     Aug 17, 2013
  10. too early, I am selling ZT/ZF. 2/5 yrs note rate is rediculously low, just 0.37%, 0.67%.

    will keep eye on ZB(seems not good for short), will buy when it hits 4.3%+ ~4.8%.

    normally the market will overract, so it is safe to short, the rate may finally print 5%,6%, even 7%,8%.market is blind,always make wrong bet.




     
    #2490     Aug 19, 2013