Anyone have experience trading inflation products? Seems to be a newer part of the market, so I'd imagine there be a decent amount of money to be made exploiting inefficiencies. What would a typical trade look like?
Need to brush up on my fixed income...
http://en.wikipedia.org/wiki/Inflation_derivative
http://inflationinfo.com/
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Expect to witness the creation of triple leveraged 'bullish' and 'bearish' inflation ETFs within the next few months.
Which inflation figures are generally used? Could you make money in that market if you have strong fundamentals or only strong technical skills? The inflation figures are geometrically and hedonically altered models put out by the BLS/Fed.
usually cpi unless i'm mistaken btw, i'm talking about trading on a bb desk, not so much interested in the tips etf in your personal brokerage account... any swaps traders out there?
Right but there's different CPI's such as core CPI and regular CPI. Also the Fed is creating a new CPI which reads lower unit amounts than previous CPI methodologies. That would be great if someone with some experience can shed some light on our questions? Thanks.
There is no such thing as core CPI or regular CPI, CPI is just headline inflation. You're thinking about core inflation which is not CPI at all, but rather PCE personal consumption expenditures price index, which is what the Fed uses in its mandate targets.
you have posted so many incorrect things in this thread. its absolutely amazing. Core CPI: CPI excluding food and energy items. headline CPI: overall consumer price index. The PCE is a completely different index than CPI, and is computed differently.
http://www.clevelandfed.org/research/trends/2010/1110/01infpri.cfm
http://seekingalpha.com/article/276907-cpi-and-pce-two-measures-of-infl…
OP are you serious?
TIPs is the only direct "inflation derivative" in the US.
An Inflation ETF would be pretty cool if someone made it.
Inflation Derivatives & specialization (Originally Posted: 12/27/2012)
i think this is the correct forum for this
I would like to specialize in Inflation Derivatives and learn it inside out so to one day start my own consulting business.
FYI -- I work for a capital market software provider that offers all derivative products - FO,MO,BO - and I find Rates & Inflation most interesting.
How can I acquire the most info in Inflation Derivatives?
Should I: 1- Read Fabozzi fixed income books? 2- do CFA? 3- Do masters in finance (I have been accepted in a SF college)
Note - I am learning a bit of Java programming at work from my coworkers
I am almost 30 years old with B.A in Finance from a non-target. I graduated college when I was 25 and wasn't completed of what career I wanted.
Thx in advance for your guidance.
Yes I am serious. What the fuck are you talking about? TIPs are not derivatives. Examples of inflation derivatives in the US are inflation swaps, caps, floors. And there are already TIPS ETFs.
You should probably read sentence number two of your link, before telling me "TIPS" are not "inflation derivatives".
any thoughts on original posting?
http://www.fabiomercurio.it/Inflation.pdf
Good luck. This guy is pimp and I don't understand this paper but apparently it's amazing stuff
Fabozzi won't really help you, but there's quite a few papers out there that can. If you need help finding them, send me a PM.
Otherwise, given the nature of the inflation mkt the best way to learn it inside and out is to practice. You need to get a job that has something to do with the mkt.
yea during war times i don't like filling up my gas tank thats why i have been taking the buss for 8 years
It is a quiet part of the rates market. most shops have 1-4 guys in the space. You're unlikely to make big money in the space, but it will certainly keep you employed. Per head pnl is prob 3-10mm on most desks.
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