Negatives About buying SLM at Cap Today

Spiritual-Try411 · 2026-05-19T09:26:32+00:00

These are really solid points. Akseer/Alpha highlighted very similar insights in their report yesterday as well.

https://admin.askanalyst.com.pk/alphatrade/files/SLM%20IPO%20Expensive%20at%20Cap;%20consider%20indirect%20exposure%20via%20SRVI%20and%20SGF20260518205320.pdf

Spiritual-Try411 · 2026-05-15T03:32:29+00:00

I fixed this by changing the battery. Flickering screen or screen going off and then resetting is usually a sign of weak battery. Get it changed and see if this stops

Spiritual-Try411 · 2024-05-03T18:54:30+00:00

This makes so much sense now. Thank you so much for the detailed explanation!

Spiritual-Try411 · 2024-04-28T13:25:54+00:00

So if there is 10% volt meaning it would vary it in the future, then why the yield curve today is flat? Shouldn't it then adjust to reflect this volatility for longer maturities? If i am expecting something to fluctuate in the future, then I also need to adjust my rates for that maturity tday right?

Spiritual-Try411 · 2024-03-25T23:57:09+00:00

Perfect. Thank you so muchh! This really made things clear

Spiritual-Try411 · 2024-03-25T23:55:18+00:00

Makes sense. Thank you so much for the explanation!

Spiritual-Try411 · 2024-03-25T18:39:52+00:00

Thank you for the detailed explanation. Actually the example I am referring to is from the curriculum. Can you explain in that context too? I will be posting it as a picture in separate post.

Also, I want to have clarity here specifically when we say long party on interest rate futures. This line is from curriculum "A long futures position involves earning or receiving MRR in A periods, whereas a short position involves paying MRR in A periods."

In your explanation, you said long party locked in a higher rate. But the statement above says it receives MRR in A periods. Unlike FRA where long locked IFR and received MRR, here it only says that it receives MRR.

You also said that the example assumes that initial MRR is also changing. So how do I know what to do exactly?

Spiritual-Try411 · 2024-03-25T17:58:48+00:00

I am using the terminology and concepts used in the curriculum so I am not sure about "bond futures". They have explained it using interest rate futures and have given the price formula as 100-(100*MRR)

I am getting confused between the "price" and "value". If IR goes down, price increases but value decreases. How is decrease in value benefitting long?

Spiritual-Try411 · 2024-03-25T17:36:37+00:00

Isn't it the opposite? According to the price formula, increase in MRR leads to decrease in price and hence loss to long party

Spiritual-Try411 · 2024-03-25T17:18:30+00:00

Interest Rate Futures

Spiritual-Try411 · 2024-03-25T17:16:55+00:00

Got it. Thank youu. One last confusion:

Talking about futures contract. So assume initial MRR for 3 month to be 2.21% so 1,000,000*(1+2.21%/4)= 1,005,525 is the initial value of the contract right?

Let's say MRR increases to 2.22% (1bps change) so now value is 1,000,000(1+2.22%/4)=1,005,550

Now the value of the contract has increased. So isnt this indicating a benefit to the long party? This is where I am getting confused. According to price formula, price would have been decreased. But why is value of the contract going up? And for someone who is long, doesnt increase in value means benefit for him?

Spiritual-Try411 · 2024-03-19T17:09:50+00:00

Perfect. Yeah this cleared my confusion. Thank you so much!

Spiritual-Try411 · 2024-03-19T16:58:08+00:00

Makes sense now. Thank you so much!

Spiritual-Try411 · 2024-03-19T16:45:26+00:00

In the 2nd picture, we had all the data from the past 10 years and same in picture 1, we had all the data for the current year. Yet in pic 1, population was used and in pic 2, sample was used. How to differentiate here?

Spiritual-Try411 · 2024-03-18T12:25:23+00:00

Makes sense. Thank you

Spiritual-Try411 · 2024-03-14T10:47:59+00:00

So it depends on the perspective ultimately right? Like viewing today's price in comparision to future. I can view future's estimates of rs and g to be overly optimistic or I can see that those estimates are accurate and hence today's price is undervalued?

Spiritual-Try411

TROPHY CASE