- UID
- 223374
- 帖子
- 202
- 主题
- 40
- 注册时间
- 2011-7-11
- 最后登录
- 2013-8-23
|
Possible shortcut for remembering some swaps stuff
Something I've deduced today:
If you are long a FIXED rate bond, THINK BOND VALUE. In other words, you want bond value to go up, you want interest rates to go down, and for purposes of hedging you want to find a product that will provide a payoff when rates go up. Vice Versa for short fixed rate bond.
If you are long a FLOATING rate bond, THINK INTEREST RATES. In other words, you want interest rates to go up, you want bond value to go down, and and for purposes of hedging you want to find a product that will provide a payoff when rates go down. Vice Versa for short floating rate bond.
This logic has worked without fail in about a half dozen problems I did today. Can someone confirm or add light to this or help me figure out when this wouldn't work? |
|