Someone got payed on a $85o million bet hat the U.S. would get downgraded.
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This makes no sense… 10YR yields are down over 20% since July 21, and down over 7% since the downgrade on Friday… Meanwhile:
“Whoever it is stands to earn a 1,000 per cent return on their money, with the expectation that interest rates will be going up after the downgrade.”
Am I missing something?
@CT,
Price up yields down….long bonds & futures money made…
of course you had to know that a downgrade would cause bond purchasing as a safe haven
Fair enough, but the article implied that the trader was betting on interest rates going UP after the downgrade (a bond sell-off), not DOWN, which is what happened.
@CT,
Perhaps a typo or misunderstanding from the writer??? It does imply the bet was for interest rates going higher.
If i was not so busy i would write the daily mail…