Bond Trader Bets $10 Million That Volatility Revival Is Imminent

Discussion in 'Financial Futures' started by Nighthawk, Jul 12, 2017.

  1. Anything is possible, but the straddle never traded in size like that in the first place... Who knows, maybe.
     
    #21     Jul 16, 2017
  2. JackRab

    JackRab

    So is the OI large compared to the other strikes? Do you have a link to OI?
     
    #22     Jul 16, 2017
  3. #23     Jul 17, 2017
    JackRab likes this.
  4. how do i practically access that data in a neat format? Manually downloading zip files from DTCC and every other repository doesn't sound fun. Paying money for SDR viewers isn't a viable option.
     
    #24     Jul 17, 2017
  5. I don't really know, tbh... I know some dealers have a way of downloading this, but I am pretty sure it's done through BBG, which offers such functionality.
     
    #25     Jul 17, 2017
  6. It's not as strange as it seems. We're sitting on a rocket engine right now, a good earnings season could send us to the moon...a failed launch could go all Challenger on us.

    We're at a perfect storm of very rosy outlooks and a lot of opportunities for that outlook to evaporate in a moment's notice. 2450 was a key pivot point and Friday delivered with the bulls in charge. This level of optimism changing to disappointment in one week would likely be the Big One.

    The thing that concerns me is that the risk profile for someone pissing away this kind of money (I.e. a prudently speculative percentage of assets) matches a lot of folks in the know in the administration...or more worryingly Congress (not subject to certain insider trading prohibitions).

    Given that bad earnings, Russia revelations, legislative agenda collapse, OPEC crises, South China Sea, and any other risk out there is in the table, there's plenty of cause for caution.
     
    #26     Jul 17, 2017
  7. sle

    sle

    Well, it feels so much like the PIMCO BSD trade but in reverse. Maybe he traded it OTC a while ago and now covered in listed?
     
    #27     Jul 17, 2017
    JackRab likes this.
  8. bone

    bone

    To buy very short term vol premium in of all things rates like that is indeed weird.
     
    #28     Jul 17, 2017
  9. Yeah, although the PIMCO convexity replication trades had a programmatic flavour to them, IIRC...

    And yeah, it could be that there was an aged OTC leg to it, but I don't recall seeing anything like that. It still would make little sense.
     
    #29     Jul 17, 2017
  10. sle

    sle

    Either that, or an equity leg - I'd be a happy buyer of that vol against similar exposure in spooz, probably.
     
    #30     Jul 17, 2017