HALISTER1: Buy USD 1y10y ATM vs Selling 1y10y OTM Payers: Commerzbank

Buy USD 1y10y ATM vs Selling 1y10y OTM Payers: Commerzbank

(Bloomberg) -- Medium to long term bearish trades in USD 10y IRS have reached fairly attractive entry levels, writes Commerzbank strategist Markus Koch, in a client note.
  • To express a modestly bearish scenario over long term, while avoiding adverse PnL effects from a contrary bullish outcome, recommend buying USD 1y10y ATM vs selling USD 1y10y OTM payers
  • Trade would expire worthless in a bullish environment while offers scaling into bearish USD exposure at zero cost
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Markus Koch (Commerzbank AG)

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