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Politics : Ask Michael Burke
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To: Knighty Tin who wrote (56249)4/17/1999 3:29:00 AM
From: Richard Nehrboss  Read Replies (1) of 132070
 
Mike,

Thanks for your well thought out and detailed response.

I tend toward the credit spread butterflies, as I'm an stock and options guy. I'm on top of the game there, but wondered where you came up with the 7000 held in money funds. If you picked up a 10 point spread 35 - 45 with a 5 point credit your collateral would only be 5 right? Just want to be sure I'm on the same page.

So we'd be looking at 4.25% in some fund, on all cash with 0 to about 10% bonus. Do you collect money market interest on the credit brought in? IE 4.25 on your cash and 4.25 on other peoples cash? In this way are you locking in 8.5 percent if you can find the 5 point total credit scenarios?

How hard are is it to find net credit equal to max spread on one side? Could you give me a few examples? I've been combing a few issues on CBOE and don't find such attractive situations.

Thanks again,
Richard

PS Any pointers to a better bond and treasury education on the web?
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