tag:blogger.com,1999:blog-4803761046040217314.post8791115871457793665..comments2023-08-04T02:21:39.483-07:00Comments on Macroeconomics at Gonzaga: When Genius Failed (Chapter 3)Ryan Herzoghttp://www.blogger.com/profile/14812028596361298161noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-4803761046040217314.post-52753336090678865862016-10-10T16:36:42.880-07:002016-10-10T16:36:42.880-07:00Snap trades were used by Long Term Capital Managem...Snap trades were used by Long Term Capital Management to capitalize on the converging spread between on the run and off the run treasury bonds. <br /><br />It was appealing to LTCM because they would have most of the purchasing power to pretty much rig the trades into their favor. This allowed them to create massive amounts of profit. Unfortunately, when the market crashed, LTCM was stuck with Michael Lettsnoreply@blogger.comtag:blogger.com,1999:blog-4803761046040217314.post-57538517413871283962016-10-10T01:09:39.871-07:002016-10-10T01:09:39.871-07:00As mentioned earlier the snap trade is Long Term l...As mentioned earlier the snap trade is Long Term looking to earn a profit on the spread of treasury bonds. This technique was very profitable in certain variables to hold true. However, when the market crashed, Long Term was holding assets that were losing money by the day. The idea of the snap trade though was one I had never seen or heard. I didn't realize that a firm or company had so Anonymoushttps://www.blogger.com/profile/01250278495873110820noreply@blogger.comtag:blogger.com,1999:blog-4803761046040217314.post-40549695771206054402016-10-10T00:23:41.771-07:002016-10-10T00:23:41.771-07:00A snap trade was when Long Term would buy off the ...A snap trade was when Long Term would buy off the run treasury bonds while at the same time selling on the run treasury bonds and anticipating that the spread between the two bonds would come back together and they would make the spread difference. This was appealing to LTCM because they had the purchasing power to make such a large amount of these trades and reap huge earnings do to the size of Justin Gwinnnoreply@blogger.com