Friday, September 21, 2012

7/10 flattener??

I'm still long my 2 units of 10yr notes from an avg price of 98-176...i would have liked to sell them in the uptrade just after the 11am buyback, but 10yr notes have cheapened on the curve today.  With the 7/10 curve at 62.5 bps...i just think that is too steep.  So, when i get flat today i will most likely sell 7yr notes instead of 10yrs, putting myself into a 7/10 flattener. 




















I'm not trying to be greedy...so i'll only be aiming to make 1.5 bps on this curve trade (though I'd feel justified aiming for 3bps).  For the moment, i'm still long my 2 units of 10yr notes (the equiv is 2.7 units of 7yr notes).  I'm hoping to sell 7yr notes at 99-01+...if stocks trade down 2 points (1455.5 on ES) we should get there.

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