Glossary entry (derived from question below)
English term or phrase:
short duration covering trades
English answer:
trades to cover short duration positions
Added to glossary by
Laura Vinti
Oct 3, 2004 15:38
19 yrs ago
6 viewers *
English term
United States
Top Quality Financial Translations
Native in: Italian 
Works in: German to Italian, English to Italian
short duration covering trades
English
Bus/Financial
Finance (general)
Bonds
Global bonds unexpectedly experienced a rally, driven by softer-than-expected economic news in the U.S. as well as endogenous factors such as ***short duration covering trades***, carry trades, and speculative positions.
What is it exactly?
Or should it read "short duration, covering trades" ...?
Thank you!
What is it exactly?
Or should it read "short duration, covering trades" ...?
Thank you!
Responses
+2
3 hrs
Ralf Lemster
Germany
Germany
Specializes in field
Germany
The language of financial markets
Native in: German
Works in: English to German, German, German to English, and 1 more.
Related KudoZ points
:
143
Selected
trades to cover short duration positions
A "short duration position" may refer to either an outright short position, or to a position with a shorter duration than the corresponding benchmark. In any case, trades to cover a short duration position involve buying cash bonds and/or bond futures - which explains why these positions would fuel a rally in bonds.
HTH, Ralf
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Note added at 3 hrs 57 mins (2004-10-03 19:36:04 GMT)
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Added comment to \'aubonmots\' response:
What you\'re getting wrong here is the concept of \'short\' (as opposed to \'short-term\').
The concept of duration is explained here:
http://www.investorwords.com/1602/duration.html
Check these references for decriptions of short duration positions:
http://www.mlim.com.au/cms/public/mlim003461.jsp
(search for \'short duration\')
http://www.hsbc.com.sg/sg/personal/online/pdf/hsbc_invtbd.pd...
(see under \'Fund Performance and Strategy\')
I used to trade that stuff for more than a decade...
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Note added at 4 hrs 18 mins (2004-10-03 19:57:19 GMT)
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Laura,
Covering a short duration position means bringing it back to neutral, or reducing the short duration. Buying cash bonds is one way of doing this (alternatives being a long bond futures position, or even taking out a receiver swap); the term \'cash\' refers to the fact that bonds are traded in the cash market (as opposed to the futures or forward market). Even a 30-year US Treasury Bond is a cash bond.
HTH, Ralf
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Note added at 3 hrs 57 mins (2004-10-03 19:36:04 GMT)
--------------------------------------------------
Added comment to \'aubonmots\' response:
What you\'re getting wrong here is the concept of \'short\' (as opposed to \'short-term\').
The concept of duration is explained here:
http://www.investorwords.com/1602/duration.html
Check these references for decriptions of short duration positions:
http://www.mlim.com.au/cms/public/mlim003461.jsp
(search for \'short duration\')
http://www.hsbc.com.sg/sg/personal/online/pdf/hsbc_invtbd.pd...
(see under \'Fund Performance and Strategy\')
I used to trade that stuff for more than a decade...
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Note added at 4 hrs 18 mins (2004-10-03 19:57:19 GMT)
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Laura,
Covering a short duration position means bringing it back to neutral, or reducing the short duration. Buying cash bonds is one way of doing this (alternatives being a long bond futures position, or even taking out a receiver swap); the term \'cash\' refers to the fact that bonds are traded in the cash market (as opposed to the futures or forward market). Even a 30-year US Treasury Bond is a cash bond.
4 KudoZ points awarded for this answer.
Comment: "Thank you!
Laura"
2 mins
Marian Greenfield
Native in English
&
English
Specializes in field
Over 30 years in financial translation
Native in: English
Works in: Spanish to English, Portuguese to English, English
Related KudoZ points
:
42
short-term trades to cover...
something, presumably foreign exchange or interest rate exposure
Ciao Laura..... Good to see you here.... Any chance you're coming to Toronto?????
msg
Ciao Laura..... Good to see you here.... Any chance you're coming to Toronto?????
msg
-1
24 mins
Johanne Bouthillier
Canada
Canada
Works in field
Canada
English to Canadian French translator
Native in: French (Variant: Canadian)
Works in: English to French
trades to cover financial liability in the short-term
in order to stay flexible because further fluctuations are exected
Peer comment(s):
| disagree |
Ralf Lemster
: "Short duration" expresses a particular interest rate position, but does not refer to financial liabilities (2) "Short" does not mean "short-term" in this context - where do you see liabilities mentioned here?
2 hrs
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my interpretation is that the trades are necessary to conver for any kinds of liability and that they are short term because the interest rate or the market trend is expected to change 2) my interpretation of covering
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Discussion
Your suggestion would bring me back to the first note I posted, i.e. cover the short duration positions would mean shifting the duration back to neutral, in this case by buying bonds... right? But why cash bonds? Aren't cash bonds short term bonds?
Could not find the term in Google.