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flattener

German translation: auf eine Abflachung der Zinskurve ausgelegte Position

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
English term or phrase:flattener
German translation:auf eine Abflachung der Zinskurve ausgelegte Position

10:59 Feb 9, 2003
English to German translations [PRO]
Bus/Financial - Investment / Securities / Asset management
English term or phrase: flattener
"In December, we put on a 2-10 year flattener in the US, given the level of the spread in a historical context and our inflation view. We also took a long position in the 20-year area of the Japanese curve relative to two-year bonds."

This describes the yield-curve portfolio strategy of an investment fund - please only answers from colleagues with a sound understanding of the financial markets. TIA
Beate Lutzebaeck
New Zealand
Local time: 11:47
auf eine Abflachung der Zinskurve ausgelegte Position
Explanation:
Sorry for providing an identical answer to both of your questions - a "flattener" and a "flattening trade" are two rather similar ways to express the same concept. You can play around with the German version in the same way, e.g. "auf eine flacher werdende" or something similar.

A "2-10 year flattener in the US" means that you're short 2-year T-Notes and long 10-year T-Notes. This is usually put on using the corresponding futures contracts. For the Japanese position, however, there isn't a futures contract in the 2-year or 20-year segment (no problem for the latter, since you can use a benchmark bond for the long position) - to set up the 2-year short position, you either need to borrow bonds and sell them short, or to use a 2-year payer swap (pay fixed, receive floating).
Selected response from:

Ralf Lemster
Germany
Local time: 01:47
Grading comment
Many thanx!
4 KudoZ points were awarded for this answer



Summary of answers provided
5auf eine Abflachung der Zinskurve ausgelegte Position
Ralf Lemster


  

Answers


35 mins   confidence: Answerer confidence 5/5
auf eine Abflachung der Zinskurve ausgelegte Position


Explanation:
Sorry for providing an identical answer to both of your questions - a "flattener" and a "flattening trade" are two rather similar ways to express the same concept. You can play around with the German version in the same way, e.g. "auf eine flacher werdende" or something similar.

A "2-10 year flattener in the US" means that you're short 2-year T-Notes and long 10-year T-Notes. This is usually put on using the corresponding futures contracts. For the Japanese position, however, there isn't a futures contract in the 2-year or 20-year segment (no problem for the latter, since you can use a benchmark bond for the long position) - to set up the 2-year short position, you either need to borrow bonds and sell them short, or to use a 2-year payer swap (pay fixed, receive floating).

Ralf Lemster
Germany
Local time: 01:47
Specializes in field
Native speaker of: German
PRO pts in category: 1620
Grading comment
Many thanx!
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