What is global macro economic arbitrage? While arbitrage actually means risk free profit, in this context we are talking about finding mispricings across asset classes and across the globe.
For instance if you think that the Euro is expensive relative to the US Dollar you would short the Euro and go long the USD. In the same manner in which you trade currencies you can do the same with fixed incomes. You can go long US Treasury bonds and go short Australian Gov Bonds if you think that the trade makes sense.
As you can tell this is not rocket science but it is also not easy. If you want to learn more go to The Macro Trader and sign up for the complimentary Global Macro Trading 101 course.
Happy Trading,
The Macro Trader
Saturday, April 18, 2009
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