Basis trades can be pretty hard for a HF to pull off simply because you get nailed on the repo haircut. I think you are in the hole like 30-40 bps on the treasury side before you even start.
EDS vs. CDS is not so cool, better off with using actual shares of stock or else shorter dated, less OTM options.
Synthetic tranches and delta hedging - there is a lot to say here. So I won't say any of it.
Credit Funds
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Nonius
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Credit Funds
on basis trades, they are ALL doing them....but not as a carry trade the way an evil bank does...;
the EDS thing is pretty phucking flaky if you ask me........if ONLY they weren't subject to MtM accounting....
the EDS thing is pretty phucking flaky if you ask me........if ONLY they weren't subject to MtM accounting....
Chiral is Tyler Durden
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Nonius
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