Look at the German certificate and warrants market. Most of the stuff is so insanely complex that it's illegal in most other countries but there they sell it to grannies. There are millions of different structures. If you can imagine it, you can trade it...no ISDA required. You won't be able to trade these if you're from the US and you cannot short them, but besides that you'll find an Eldorado of opportunities
No shit. The 2 year is now yielding +4%. So why not put a chunk of change into that for a risk-free yield gain? A 2-year lock-up is not so bad considering what the stock market has done for the past two years. Two years looking forward? Good lord.
The beautiful world of bond math^^ The relationship between price and interest changes is not linear. Can have positive convexity (non-callables) or negative convexity (preferreds)
Well that is confusing. I would have to do some studying on that subject. I came across the attached picture from a website, it shows the payoff as a flat straight line for bonds. Is there something I am not understanding here?
you're looking at terminal distributions, not at the movements in bond price as a result of interest rate changes. First step: https://www.investopedia.com/articles/bonds/08/duration-convexity.asp