Wild West of Desks
bondarb says the repo desks are like the "wild west." does anybody care to comment on other crazy desks?
bondarb says the repo desks are like the "wild west." does anybody care to comment on other crazy desks?
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in what way is repo the wild west?
i dont no. bondarb sad it was
bondarb: "The business of borrowing/lending bonds (called repo trading) is still essentially in the stone age and is rife w/ "wild west" tactics like short squeezes and other tricks...in other words it is way more of an art then a science that some computer nerd could automate"
...didnt mean to start a commotion...but repo trading in govt bonds is very old school. Many of the traders arent even college grads and the tactics that they use are very...well...unscientific. However, the money is not that great in repo trading, its not something that most people aspire to do as you generally dont get rich doing it. However, i brought it up just to point out that the financing aspect of bond trading makes it much more of an art then stock trading and therefore it is more difficult to automate. The New york Fed has done some recent work on malfesence in the repo market and you can find more info about squeezes and similar trades on their website.
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