Trading the Volatility in Interest Rate Options
Traders have been increasingly eager to speculate on the future direction of interest rates. The volatility implied by options on 2-, 5-, 10-, and 30-year Treasury notes and bonds has lifted the Merrill Lynch MOVE Index above 110. For perspective, note that the recent high of 116 occurred on May 6, the infamous “flash crash” day. Despite the well-known concerns many have about the complexity of leveraged ETFs and options on them, speculators haven’t hesitated to express their…
Tuesday, August 31, 2010
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