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TskTsk
Registered: Dec 2011
Posts: 343 |
08-09-12 07:51 PM
Quote from trader198:
when someone's credit score drops, his/her borrowing cost shold be higher. if U.s. goverment (suppose) will go bankrupt, then the rate should be higher.
like late payment of credit card, or morgtage, will demange a persons' credit score. normally he/she can borrow at the ordinary rate, but credit card compony or banks will charge higher rate or well high rate if that person wants to borrow even no one wants to lend him/her.
the most recent stock market crash 198X something, most people's home mortage is at 8%~10%. since I have an old buddy(retired recently), he pays that rate, kind of crazy.
do safe haven really exist? I heard CA government had trouble to pay bil
We're talking about a stock market crash, not us govt default. us govt is the de facto safe haven
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Doobs789
Registered: Feb 2008
Posts: 558 |
08-09-12 10:34 PM
I would wait until next week to initiate a bearish TLT play, might get better prices. But, I am inclined to take the downside. No real edge on vol though.
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Spectre2007
Registered: Dec 2006
Posts: 6296 |
08-10-12 03:49 AM
look at debt/gdp ratios globally... shows how much US can print money.. We are not anywhere close to hitting a ceiling on printing money or quantitative easing.
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Cren1
Registered: Jun 2011
Posts: 32 |
08-10-12 08:35 AM
Hi, trader198.
I hope TLT plunges 'cause I'm long TLT's Gamma, too (actually I just hope it DOES move more than now, because my actual position has a strangle-P&L-profile).
But you should consider more carefully what clacy states here:
Quote from clacy:
Except the exact opposite will happen if the stock market crashes. Rates go lower as money flows into the safe haven of the US Treasury market which pushes the price of TLT up. Look at what happened in 08-09
You should explain us why you think that, if the stock markets plunges, TLT should not soar because of the usual fly-to-quality behaviour in such situations.
Indeed, I guess unexpected bad news would bring your Put far OTM... don't you think?
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trader198
Registered: Mar 2010
Posts: 1217 |
08-10-12 11:43 AM
I got out all my oct.10 puts yesterday when 1:00 30-T aution, I thought it will drop like 10-t aution the day before. noticed it bounce from the drop, glad I got out, locked some gain. but I still kept 123put (oct.17,next week), I suspect I may be wrong, it may become worthless.
heard China is slowing, even in deflation mode. that is aganist my TLT put?
another negative thing against my TLT put is the historical dry, food price rally?
technically, TLT forms a double top, then it goes down 50EMA, a perfect time to short it. I know technical most time just non-sense.
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