3 ms·
What's the significance of 98 to 97 ?
by xeromal 4y ago
What's the significance of 98 to 97 ?
- ProjectArcturis 4y ago$98 per share to $97 per share.
- browningstreet 4y agoThis reader is still hoping for an explanation of the significance.
- shubhamkrm 4y agoI assume the point the GP is making is that it's not at all significant.
- bjornsing 4y agoWell the OP says the retail rate went from 5.5% to 6% as a consequence. Not very significant either, right? Surprise comes from data that violates your expectations. I guess it’s mostly a matter of expectations here. Also, ETF buyers are probably less knowledgeable / professional / sophisticated than buyers of the underlying asset.
- ProjectArcturis 4y agoThe ETF has a redemption mechanism that keeps its trading price aligned with the underlying net asset value. Thus, the sophistication of the ETF buyers is irrelevant.
- bjornsing 4y agoGood point.
- mike_d 4y agoNothing. They just found a random ETF that owns MBS and quoted the stock price, while the original article is talking about the MBS market (which isn't part of the stock market). It's like inferring the health of the commercial real estate market in the bay area by quoting Google's share price.
- xeromal 4y agoThanks. Not really familiar with that ETF so I wasn't sure if that was a big change or a small change but really it's an irrelevant change to the conversation.
- ProjectArcturis 4y agoNo, he's super wrong. That ETF is a basket of MBS. It's traded on the stock exchange so people can trade MBS as a general concept, rather than buying and selling individual bonds. If there were truly a "no bid" situation, the price of existing MBS would crater, and the price of the ETF would crater.
- ProjectArcturis 4y agoTell me you don't understand finance without telling me you don't understand finance.