big cheap money. Where to get?

Discussion in 'Professional Trading' started by john30, May 6, 2006.

  1. pawmarks

    pawmarks

    #21     May 10, 2006
  2. Choad

    Choad

  3. #23     May 10, 2006
  4. john30

    john30

    still no reasonable answer :(
    looks like nobody knows that and even never thought about that :(
     
    #24     May 10, 2006
  5. No



     
    #25     May 10, 2006
  6. Did you actually read my earlier post to you (repeated above for your convenience)? Frankly, it appears that you are the one who has yet to do any thinking here.
     
    #26     May 10, 2006
  7. If you can go for 3 MM you can borrow from IB. They lend at LIBOR + .25% for debit balances of 3 MM or more. That would be roughly 5.25% right now. This assumes your bonds are marginable.

    You're making a huge bet on the yield curve if you try to borrow short-term to pay for long-term bonds. Banks go broke doing this.

    Traveler
     
    #27     May 10, 2006
  8. You are assuming virtually no credit risk premium? That's a rather generous assumption regarding our new friend's credit worthiness, don't you think? Further, I did not get the impression that he was looking to subject himself to interest rate risk, judging by his posts. Unless I am mistaken, I think he wants to lock in a risk-free spread. I think Electric said it best: "No."
     
    #28     May 10, 2006
  9. I'm betting the OP isn't going to put his leveraged 1 MM cash into an instrument of the same duration and risk. He could probably build the same position in the derivatives market without doing all the borrowing.

    Traveler
     
    #29     May 10, 2006
  10. sccz97

    sccz97

    incredible ...
     
    #30     May 10, 2006