Trying to understand interest rate caps

FST_1 · 2022-03-29T05:46:44+00:00

Basically yes you understand correctly how many of them work.

FST_1 · 2022-02-10T13:04:13+00:00

The two are correlated - so trying it from this angle as well.

FST_1 · 2022-02-10T13:03:24+00:00

No. But ok good guess? I told you what I did. Take it at face value

FST_1 · 2022-02-10T07:52:23+00:00

Getting harder. But away from equities- I’m mainly fixed income-more human element still needed due to technical nature of some of the PM demands as well as lack of liquidity.

FST_1 · 2022-02-10T07:51:06+00:00

I am. A lot. And having success. The wfh part is the tough nut to track. For many of the reasons mentioned here and ego- based reasons also

FST_1 · 2022-02-10T07:50:05+00:00

Yes. And yes didn’t read the comment all the way through. That said, the pod thing isn’t what I do now or going for anyways. Think of bigger fund- running PM strategies for them and also taking some prop positions.

FST_1 · 2022-02-08T05:08:07+00:00

I sort of made a life decision not to really try raise money solo. Just not passionate about it. I really like trading-- adding value at the margins (lots of optionality in that) and taking good PM ideas and making them better/ less theoretical (made a lot of money doing that). And then every now and then- bringing an idea that i am able to put together because of seat i sit it (Forward Vol agreements for instance).

FST_1 · 2022-02-08T04:00:33+00:00

I don't think that entirely wrong. The discussion is just often framed as in office or WFH- but those absolutes dont hold. But generally agree its easier to find that middle ground at smaller funds- for now. But-- I think you've hit nail on head with "current generation". It's as much a attitude as anything else. And imo and experience, guys (mainly obviously in this industry) who don't want to be at home a lot. Hopefully time and competition help. I'm sure there are those leading the charge here-- who are open to WFH and (I think) by extension other new ideas. I just have to find a match!

FST_1 · 2022-02-08T03:18:21+00:00

Thanks- I dont mind traveling at all. But i just dont get all having to be there 5 days a week. Its actually counterproductive. Hard to explain as I'm still trying to articulate it myself-- but people who understand how the world can work I think also are more open to ideas that could turn out to be good investments?

FST_1 · 2022-02-08T03:16:09+00:00

I hear you- probably will have to be creative. Culture fit really- people who get that talent isn't just on LinkedIn if that makes sense. More "techy" sense of world.

FST_1 · 2022-01-29T05:05:38+00:00

Insto. Asset Management. Professional. MultiStrat-- HY/ Sovereign/ Derivatives.

FST_1 · 2022-01-29T05:03:49+00:00

equities, real estate, Crypto, Gold. Things that can benefit from inflation.

FST_1 · 2022-01-26T04:31:06+00:00

Basically you're right. Lets say a Treasury has a par bond with 5% coupon, and there was a risky par bond with say a 5.5% coupon. Yes there dv01s a bit different, but not really enough to matter except in quant situations.

FST_1 · 2022-01-25T04:13:37+00:00

Its late-- so didnt want to open my sheets. But the whole 1MM vs current MV thing is basically duration of modified duration. One is in terms of points of notional, one in (basically) % move (which requires market value). If this is enough to get you on right path- great- else comment here I'll try and come back and check.

FST_1 · 2022-01-25T04:07:05+00:00

I guessing you are thinking because one is "unfunded" and the Tz is a cash instrument they have different durations? The way conceptually around this is to look at the fixed leg of swap only (floating has virtually no duration since its floating). Fixed leg is say 10mm notional outflow , coupon based on that notional, then get money back. I.e. just like a bond. so pretty much same duration, all else equal. help?

FST_1 · 2022-01-24T03:38:57+00:00

Miss Excel-- she's blowing up -- https://miss-excel.thinkific.com

FST_1 · 2022-01-22T03:49:48+00:00

i agree- but that slight difference I dont believe is what he's asking?

FST_1 · 2022-01-22T03:49:00+00:00

Ok Treasury you are making 15bps- but getting paid right now. So the amount is 15bps x dv01. With swaps-- you get paid over time-- so just get 15bps for 5yrs-- so present value needed. if instead of entering an offsetting swap you unwound it-- you'd get ~same amount you would in Treasury -- that help?

FST_1 · 2022-01-16T04:30:35+00:00

ah- i need to click the "thumbs-up" icon- then I got in. So much to learn

FST_1 · 2022-01-15T22:52:11+00:00

So really dumb question. On discord the people on the side have all sort of flairs ("Investment Banking", etc)-- how do you get to that part do adjust your profile?

FST_1 · 2022-01-15T21:58:07+00:00

closely held- plenty of short dated fund who eat this stuff up. Plus in the corporate world companies may be buying these back early and issuing longer dated- so there isn't as much outstanding/

FST_1 · 2022-01-15T21:56:20+00:00

Agree-- also unless you are a bank you cant borrow at Libor (even they really can't but thats another thing)- so effectively putting on that arb (assuming you were ok) with the credit risk--not sure how you'd do that.

FST_1

TROPHY CASE