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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: russwinter who wrote (4701)1/9/2004 8:44:56 PM
From: mishedlo  Read Replies (1) of 110194
 
In conclusion the ED and FF market is just unbelievably complacent about nearly free borrowing rates in the face of massive economic distortions.

I fully understand what the FF and Eurodollars did do.
I also said that June became FULL PRICED today.
March 2004 IMO is beyond full price.
That said.
The ED futures still imply a 1 point hike by March of next year. I do not believe the FED is hiking before the election come hell or high water. On that basis, is the FED going to hike 1 full point from december to March 2005?

Now let's take a look at my position.
I am short the March 2005 95.250 Puts.
Do you REALLY think that position is at risk?

I am short DEC 2004 96.250 Puts.
Is that position at risk?

I am short June 2005 95.000 Puts
Are those at risk?

Do you see how I am trying to stay ahead of the curve even if I am wrong about my belief that rates are not going up huge.

Note: I did and still do have other plays on, but the bulk of my position is on way OTM stuff. I took off somne stuff today that I collected 12 basis points for and I covered for 1.5 basis points.

I am positioned to be wrong.
I will get crucified only if I am INSANELY wrong.
Do you have a different opinion of the risk of my position now vs before?

I am seriously considering shorting some March 2004 puts to protect against insanity striking early (now that they are 100% fully valued). Every day that passes without a rate hike kills time off the puts that I am in.

Mish
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