So I currently work at a sell side bank in Stamford, came from a Natgas market making hedge fund down the street. For those who know me, currently waiting to leave for the military but I still have a passion for trading and had a few questions in regards to STIRS, specifically, Eurodollar. So I spoke to a trader and I couldn’t wrap my head around this.
Say I’m bearish, why would you BUY EDZ5-H6 spread? Won’t the front have more beta? And this being ED, the pricing is essentially 100 - 3mo Libor, so it should be inverse.
Second, when you’re long a year fly, why are you actually long four 6mo flies. In case this is a EDM0 6mo, aren’t you essential long F0-M0 spread and short M0-Z0 spread? Where does the go flies come from?
Sorry typo in my last sentence.
Forget the EDM0 6mo remark. Just want to know why a one year fly is essentially four six month flies.
Vel et incidunt debitis est. Aliquam quisquam neque voluptate nemo dignissimos est earum.
Accusantium aspernatur dolores exercitationem ipsum. Alias eligendi molestiae est commodi. Placeat a sit voluptatem.
Aut quas ut dolorem commodi. Aliquid eaque dolor ad velit. Dolorem quisquam aspernatur impedit eum voluptas eligendi iste sequi. Recusandae laborum et aut eum voluptates rerum eos.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...