Re:Wall Street’s Latest Love Affair with Risky Repackaged Debt
by cinquemb on Wednesday March 20, 2019 @06:16AM
(#19440610)
> Real life is a little bit different though. How many option sellers are you going to find if the company is easy to drive to bankruptcy?
Well, right now, "somebody" is selling long dated OTM put options on some ETF's that are filled with +95% junk rated bonds and/or CLO's, with some of the strikes having +100k OI for pennies on the dollar (ex. HYG60P12202019), which in normal times might be easy money from selling… I'm sure the big boys have better ways of getting exposure as well.
Well, right now, "somebody" is selling long dated OTM put options on some ETF's that are filled with +95% junk rated bonds and/or CLO's, with some of the strikes having +100k OI for pennies on the dollar (ex. HYG60P12202019), which in normal times might be easy money from selling… I'm sure the big boys have better ways of getting exposure as well.