Wide BAC CDS but low Ted spread

Discussion in 'Trading' started by Cyrix, Aug 12, 2011.

  1. Cyrix

    Cyrix

    This is not different from trading any other securities for example Walmart stock. Outcomes are always some what depending on random events, but it doesn't mean that we don't trade Walmart.


     
    #11     Aug 14, 2011
  2. I agree that the outcomes are always random to an extent. However, in the case of Walmart stock there's a reasonable expectation that the final return on your position is tied to Walmart performance (as defined by dividends, balance sheet, etc). In the case of a contract I have defined its fundamental value is random in an unquantifiable way. It's an "unknown unknown", so to speak, whereas the value of WMT is a "known unknown". See what I mean?
     
    #12     Aug 15, 2011
  3. gmst

    gmst

    Exotics, Exotics - chooser -- hedge your deltas and play cross-gammas :) hahaha ...Good example Martin.
     
    #13     Aug 15, 2011
  4. Haha, wasn't my intention to bring that sh1te in. Moreover, this one isn't even a chooser. I think I may have invented a new financial product :).
     
    #14     Aug 15, 2011
  5. gmst

    gmst

    yes, the random choosing makes it all the different. Not saying this product is going to be a hit one, but some of the best innovations have happened as a result of serendipity or mindless ramblings of learned men! :cool:
     
    #15     Aug 15, 2011
  6. Ever since 2008 most have recovered. The only one that never really did was BAC. Always been shaky. I have a hard time believing they're not done.
     
    #16     Aug 15, 2011
  7. 420 bps...... Could be the end for them. Still tough to see how it's not
     
    #17     Aug 23, 2011
  8. Illum

    Illum

    The speed is so intense, I think people really want their money, there is zero trust. A case of how much will I get back is turning into, gimmie whatever you have right now.
     
    #18     Aug 23, 2011