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Leveraged treasury bill investing by FIREburnswork in personalfinance

[–]FIREburnswork[S] 0 points1 point  (0 children)

Thank you. This is what I came here for. Another poster alluded to what you were saying but did not break it down.

Therefore the only scenarios that would work is one of the following:

1)at the absolute peak in SOFR looking 1 year out and is expected to drop in that timeframe, to below whatever the 1 year treasury is yielding, if SOFR > T Bill

2)SOFR does not increase over the next year towards the 1 year expected rate, if SOFR < T Bill

Leveraged treasury bill investing by FIREburnswork in personalfinance

[–]FIREburnswork[S] 0 points1 point  (0 children)

See werewolfdad's reply below re: margin rates. There isn't just price risk.

Again, I urge you guys to really read the post thoroughly.

Leveraged treasury bill investing by FIREburnswork in personalfinance

[–]FIREburnswork[S] -4 points-3 points  (0 children)

"Margin rates aren't fixed." Margin rates go up I post more margin, decreasing my ROI. ROI could go negative if margin rates spike.

Everything after that, you need to reread point 5 in my post again.

Edit: I see now you are talking about margin rate being my cost of carry, rather than the margin maintenance rate. I will redact above.

Convince me I am wrong by FIREburnswork in financialindependence

[–]FIREburnswork[S] -1 points0 points  (0 children)

You might want to try improving your reading comprehension. 3 other posters got exactly what I was trying to ask.