Shorting Bonds/Bond ETFs

[steadyeddy]

I want to gather more knowledge on this subject.

I suppose Bonds & Bond ETFs are typically short-able? If so, how common is this relative to say stocks/stock ETFs?

Thanks in advance for sharing.

Eddy

[yogibearbull]

For very short-term trading, look at inverse ETFs that are leveraged -1x, -2x, -3x. 

Direct shorting may require account margin/shorting approval and some more study. Shorting means that broker borrows the security you are shorting [and you pay the fee] and illiquidity may be an issue.

[steadyeddy]

Feb 25, 2021 18:59:53 GMT yogibearbull said:

For very short-term trading, look at inverse ETFs that are leveraged -1x, -2x, -3x. 

Direct shorting may require account margin/shorting approval and some more study. Shorting means that broker borrows the security you are shorting [and you pay the fee] and illiquidity may be an issue.

Thanks YBB. My question was more on major market participants like institutional funds. Do they short bonds/ETFs often? How does that compare in volume to the stock counterparts?

[yogibearbull]

Feb 25, 2021 19:36:02 GMT steadyeddy said:

Feb 25, 2021 18:59:53 GMT yogibearbull said:

For very short-term trading, look at inverse ETFs that are leveraged -1x, -2x, -3x. 

Direct shorting may require account margin/shorting approval and some more study. Shorting means that broker borrows the security you are shorting [and you pay the fee] and illiquidity may be an issue.

Thanks YBB. My question was more on major market participants like institutional funds. Do they short bonds/ETFs often? How does that compare in volume to the stock counterparts?

OK. Some ETFs such as retail XRT and financial XLF are among the heavily shorted ETFs. It may be part of institutional hedging strategy.

[Deleted]

i do not own bond funds except for what is in Wellington. So what categories of bonds are correcting and when will it get attractive again to go long bond funds?

agg is down -2.15% ytd thats is hardly anything

[steadyeddy]

Feb 25, 2021 23:10:21 GMT @waffle said:

i do not own bond funds except for what is in Wellington. So what categories of bonds are correcting and when will it get attractive again to go long bond funds?

agg is down -2.15% ytd thats is hardly anything

@waffle , I take it you are equity heavy in allocation. So, depending on what type of equities you own the bond yields may or may not impact you much. If you hold high-growth stocks and if the bond yields continue to rise you will see those stocks correct more. I posted a response to a thread you opened "bond correction - where?" and you might find that video very informative.

Thanks and Happy Investing!