Position for Possible 15-20bp Pullback in 10Y Bund Yields: SG
(Bloomberg) -- Short-term conditions in bund yields have become extremely overbought; risk of a correction is significant, writes Societe Generale strategist Jamal Meliani, in a client note.
- Buy the April 160.50-159-158 put ladder at ~3c; target 30c, stop -10c
- Trade is delta neutral at inception, gamma negative and theta positive
- Risks: Beyond 156.50, losses are potentially unlimited which may occur with a dramatic improvement in the risk complex that leads to a rapid and sustained sell-off over a very short span
- Struggle to see what grand plan could rapidly turn around global conditions, though hopes are building for coordinated action at the G-20 meeting
Alert:
HALISTER1Source: BFW (Bloomberg First Word)
People Jamal Meliani (Societe Generale SA)
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