That might work, but if the bonds are illiquid, often the derivatives are as well, or, the derivatives trade rich to where an identical
bond would trade in the cash market.
After estimating likely cash flow streams, I tried to estimate where a single - B
bond would trade in that environment; that is, if it would trade.
That is not a 100 % probability (otherwise
the bond would trade at a higher price / lower yield to reflect the lower risk).
The «arbitrage» community also plays a role in these loops, especially when quoted bond «prices» don't reflect the reality of where
the bonds would trade.
When there is a lot of pressure to short, prices overshoot on the downside, and stay well below where the cash
bonds would trade.
Not exact matches
The threat of a
trade war
would also freak out the overseas investors we count on to buy our government
bonds, and keep our interest rates at super-low levels.
More from ETF Spotlight: In run on S&P 500, investors favor 3 stock and
bond bets Biggest stocks were biggest losers in Q1 Watch: How much
has Boeing and China
trade war hurt ETFs?
The dollar
has rallied through much of the past week as concerns over the U.S. - China
trade dispute receded, and as the U.S. 10 - year
bond yield shot past 3 percent for the first time in four years.
The firm also notes that a recent report from the New York Fed, which we wrote about here, discusses the role that electronic and automated
trading could be playing in the
bond market, particularly how these dynamics may
have exacerbated the
bond «flash crash,» an event JPMorgan CEO Jamie Dimon said is the kind of thing that happens «once every 3 billion years or so.»
Exchange -
traded funds that track high - yield
bond indexes
have been the beneficiaries of a cash surge in recent weeks.
Prices of the riskiest portions of collateralized loan obligations (CLOs)
have fallen 50 % as of the end mid-December since mid-year, and are now
trading at $ 0.25 for every dollar that investors
have put in the structured
bonds.
U.S. banks
would therefore not be able to
trade or hold Canadian federal and provincial government
bonds.
Trump's apparent desire to rewrite
trade rules
has been the biggest reason for volatility in the stock and
bond markets.
It already
has a joint venture with Algomi, which will see Euronext leverage Algomi's
bond trading technology to push into North America and Asia.
Exchange -
traded funds that track high - yield
bond indexes
have been the beneficiaries of a cash surge in recent weeks as market participants figure the central bank probably won't raise rates in 2015, and it could be well into 2016 before anything happens.
And
bonds at some well - known companies, like American Express and retailer Neiman Marcus,
have been
trading at 30 % of their original value.
Sure, some of that
had to do with Goldman beating earnings expectations, passing its Fed stress test and unexpectedly making a killing
trading bonds, but the election likely factored in too, and investors can thank Clinton for that.
Deutsche Bank and or / its affiliate (s)
has a significant Non-Equity financial interest (this can include
Bonds, Convertible
Bonds, Credit Derivatives and
Traded Loans) where the aggregate net exposure to the following issuer (s), or issuer (s) group, is more than 25m Euros.
Since the start of 2017, Chinese regulators
have announced a slew of steps to coax financial institutions to reduce riskier activity and leverage, targeting everything from interbank lending levels to
bond trading, negotiable certificates of deposit and entrusted loans.
The board
has been dealing with the volatility of publicly
traded stocks and low returns from government
bonds by diversifying into other forms of assets, including equity in private companies and investments in infrastructure such as highways and real estate.
The low liquidity levels are caused by a combination of regulations, which make it less attractive for big banks to hold inventories of
bonds for dealing, and new forms of quick, computerised
trading, which
have the potential to move markets in times of stress.
Other Wall Street firms
have resized their
bond trading in the past year, as business
has been slower than expected.
In Japan, the central bank's efforts to boost the economy through extraordinary monetary stimulus are
having an unintended consequence: Few want to
trade the government's
bonds.
With inflationary pressures and massive budget deficits
having become the topic du jour this year, the
bond - market «vigilantes» term
has made its way back onto
trading floors.
With stocks
trading near all - time highs and
bond yields still relatively low, some investors
have turned to alternative asset classes.
Finding a significant increase in the number of mini flash crashes in the early minutes of
trading on October 15, 2014
would help explain the origins of the October 2014 U.S. Treasury
Bond Flash Crash and reduce the causal uncertainty surrounding the flash crash.
BlackRock, for instance,
has endlessly pushed electronic
trading of
bonds, but at most that
would reduce the costs of immediacy by bringing buyers and sellers together more efficiently.
Instead of perennially playing Avis to Goldman Sachs» Hertz in the lucrative but dangerous business of
bond trading, Mr. Gorman
has focused on safer ways of making money.
Chief Executive Officer Lloyd Blankfein, 61, is trying to ride out a years - long
bond -
trading slump that's being compounded by market swings and stiffer regulations — challenges that
have forced many competitors to scale back.
The federal government failed to make its case that something about
trading stocks and
bonds and derivatives
has changed so fundamentally in recent times that Ottawa must now step in.
Only with
bonds it's even harder to create a diversified portfolio using individual
bonds on your own unless you (a)
have a large amount of capital (typically
bonds are sold in lots of $ 10,000 or $ 100,000) and (b) know how to
trade bonds on the open market (transaction costs can be larger for
bonds than stocks because of the spreads and lack of liquidity).
These assets can be shares of stock in other corporations, limited liability companies, limited partnerships, private equity funds, hedge funds, publicly
traded stocks,
bonds, real estate, song rights, brand names, patents, trademarks, copyrights, or virtually anything else that
has value.
Remington also
has $ 250 million of
bonds that come due in 2020, and are
trading at a significant discount to their face value at 22 cents on the dollar, according to Thomson Reuters data, indicating investor concerns about repayment.
First it was options, more recently
bond trading, which
has been fantastic in terms of return.
The company suspended
trading this month on more than $ 2 billion worth of
bonds and said it
would seek to restructure its debt.
And investors
have a wide field to choose from, whether it's through actively managed
bond mutual funds or low - cost exchange -
traded funds (ETF), or a combination of both.
On Argentina: «You
have defaulted
bonds trading above par, which is kind of interesting.»
Investors considering Treasury securities
have opportunities to buy
bonds both at regularly scheduled auctions (see Auction Schedule) and in the secondary market, which is one of the world's most actively
traded markets.
Among junior employees in
bond trading and investment banking, about one - third said they
'd choose a better work - life balance.
His theory
has been distilled by others and spread widely to the public as something akin to the following: An investment portfolio should be a balance between publicly -
traded stocks and
bonds, starting with a ratio of 70:30, transitioning away from stocks and into
bonds as the investor gets older.
«Liquidity,» in fact, is THE watchword now in
bond trading — ironic, considering that the U.S. central bank's primary intention
has been to boost the flow of cash through financial markets, drive a push toward riskier assets like stocks and corporate credit, and thus generate a wealth effect that
would spread through the economy.
This convergence of yields
has implications for the behaviour of investors: with
bond yields in different countries tending to move together, investors
have found it more difficult not only to diversify their portfolios but to find
trading opportunities.
Bond fund withdrawals might have had a greater effect on markets where there is less trading, such as municipal securities — but even there, redemptions from bond funds would have accounted for less than 10 percent of the primary dealers» trad
Bond fund withdrawals might
have had a greater effect on markets where there is less
trading, such as municipal securities — but even there, redemptions from
bond funds would have accounted for less than 10 percent of the primary dealers» trad
bond funds
would have accounted for less than 10 percent of the primary dealers»
trading.
Espirito Santo Financial Group SA, which owns 25 percent of the lender, fell 8.9 percent before the company suspended
trading earlier in stocks and
bonds, saying it's «currently assessing the financial impact of its exposure» to Espirito Santo International, which
has missed payments on short - term paper.
Since 2007, U.S. equity mutual funds and exchange
traded funds
have suffered net outflows to the tune of $ 250 billion while close to $ 1.6 trillion
have flowed into
bond funds — wow.
He
has experience in
bond trading, equities
trading, settlement and pricing, as well as stock market analysis.
While the
bond market in general
has become relatively illiquid, the corporate junk
bond market is now largely
trading in «step function» prices for anything larger than «one - sies and two - sies» ($ 1 to $ 2 million
bond trades).
Morgan Stanley
has set - up sales and
trading platforms specifically to ensure that a broad range of retail investors
have access to new issue allocations and to the most liquid green
bonds in the secondary market.
The
bonds have not moved in response to that rumor, with the Glencore 5.95's of 2020
trading in the 70's.
By storing its surplus export revenues in Treasury
bonds, South Korea nudges up the relative value of the dollar against our competitors» currencies, and our
trade deficit increases, even though the original transaction
had nothing to do with the United States.