Monday, June 8, 2009

The Levered Steepener Trade Blow Up In Full Visual Glory

The chart below demonstrates the 1 year forward level on the 1 Year treasury. Someone really just went all in on Bernanke's bluff. 2Y/1Y flatteners anyone? Wait, what's that? Every prop desk had a steepener on and was highly levered into it? Basis trade blow up deja vu anyone? Wait for opportunistic hedge funds to be ramping into the flattener and killing who knows how many props on the wrong side of the trade.

hat tip Credit Trader Sphere: Related Content
Print this post
blog comments powered by Disqus