Stocks and Trading Thread - Channeling your inner Mono

[citizen k]

Not bad. My game accounts got zeroed out by the cheating incident, but I don't think I ever got as high as that. It was in the eleven thousand range.

My "short the euro" portfolio was doing very well though. 

That's what sucks about these contests. Someone tries to cheat and ends up ruining it for everybody.

[Admiral Yi]

Buffet bought stakes in Intel, IBM, and DirectTV.  Or Dish, I can never keep them seperate.

[alfred russel]

I'm thinking about shorting treasury bonds. The 30 year just went under 3% yield. Does anyone have ideas on the best way to do this?

I'm thinking about shorting the long term bond fund at Vanguard (EDV). There are some short bond funds out there, but EDV is transparent regarding what is in it, so I can see what I'm getting into.

[Admiral Yi]

No.  Never heard of bond options or futures, and short-selling is not an option for retail traders/investors I don't think.

[alfred russel]

No.  Never heard of bond options or futures, and short-selling is not an option for retail traders/investors I don't think.

There are a variety of derivatives out there to hedge or speculate on interest rate changes, but I don't know to what extent these are available to retail investors (I've never touched them).

I've shorted stock before--average joe can do that.

[Admiral Yi]

I've shorted stock before--average joe can do that.

Are you talking about buying puts, or are you talking about paying to borrow stock and then dumping it?

[alfred russel]

I've shorted stock before--average joe can do that.

Are you talking about buying puts, or are you talking about paying to borrow stock and then dumping it?

The latter.

[Admiral Yi]

Really?  I had no idea.

[alfred russel]

Really?  I had no idea.

It isn't a great thing, imo, because if your position goes negative you get hit with nasty margin interest rates (unless you have a lot cash the rates are high). Also if what you are shorting pays dividends (or interest payments in the case of a bond), you are stuck paying those.

[alfred russel]

I'm going to bump this, because even though I only posted this last night, by this morning it is already off the front page. 

Apparently Languish isn't dying in Europe.

[MadImmortalMan]

Short TLT.

[alfred russel]

Short TLT.

Any reason for TLT over EDV? (they seem about the same, except EDV has slightly longer duration, which would give me more interest rate exposure)

[MadImmortalMan]

Not really. I watch TLT because it seems to be a better indicator for the market and trades inverse to stocks fairly closely. So it's my favorite bond etf. It moves more.

[alfred russel]

Not really. I watch TLT because it seems to be a better indicator for the market and trades inverse to stocks fairly closely. So it's my favorite bond etf. It moves more.

Thanks MIM. Do you know of any derivatives that might give exposure to treasury rates and are available to retail investors?

[MadImmortalMan]

There is a new etf coming soon from Barclay's.

http://etfdailynews.com/2011/11/21/ishares-funds-files-for-ishares-barclays-u-s-treasury-bond-fund-etf/

The iShares Barclays U.S. Treasury Bond Fund (the "Fund") seeks investment results that correspond generally to the price and yield performance, before fees and expenses, of the Barclays Capital U.S. Treasury Bond Index.

No symbol yet.

It seems there is a lot of movement in the market anticipating higher rates now.