Hedge against increase of interest rate

Discussion in 'ETFs' started by Nym, Jul 6, 2012.

  1. Nym

    Nym

    ehm... not really if you borrow a fix interest rate it will be high for the current market time. If you are doing the opposite you are actually increasing the risk that you want to hedge
     
    #11     Jul 7, 2012
  2. ForAPlus

    ForAPlus

    No, he's right; Shorting a treasury bond is equivalent to borrowing at the treasury's yield; The fact that you shouldn't be able to borrow at the gov't risk premium is accounted for by the haircut on the bond and the repo rate.

     
    #12     Jul 9, 2012
  3. Nym

    Nym

    Actually you have a point. Unfortunately many of us can short bonds with IB or similar, but maybe we can do something with the future. However, i am not exactly comfortable with bonds future...
     
    #13     Jul 17, 2012