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Investing/Strategies / Bonds & Fixed Income Investments
|Subject: Re: STRIPs and TINTs||Date: 10/4/2012 8:28 AM|
|Author: altstrat91||Number: 34446 of 35930|
there is nothing worse than speculating on the correct direction a given index/asset will take in the future but being a little too early. i had some great directional bets a few years back and played put options but was too early, missed the move, and lost 100% of the premium i paid for said options.
also remember when vix starts rising, premiums on downside/derivatives shoot up plus if you are trying to give yourself enough time to have the scenario play out you pay additional premium for that as well.
i mentioned the idea of shorting STRIPS in another thread. it sounds very appealing to avoid possible road blocks above and due to the sheer available volume/size/liquidity on a daily basis of STRIPS something to really consider. all brokers are not equal though so in addition to the standard trade commission, make sure you inquire about any carrying costs, etc. at least you are not on the hook for any bond interest with zeroes.
it sounds like charlie is a little partial to futures and that is great. i have dabbled in these as well. everyone should do what is comfortable for them and i am not stating that the only way to play this next big trade move is shorting STRIPS either.
all above discussion is offensive maneuvers. one way to defensively play against the next market move is how you stagger your portfolio. in the last 18 months i made a conscious effort to bail on all long term corps and now i am overweight in short term maturities; in particular the 3-5 year time period. this will allow me the ability to put on potentially new positions as old ones redeem if and when yields finally start going back up again.
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