A trader has an idea about what inflation will look like in 2025-2030 (The 5 Year period starting 5 years from now).
Lots of other people have ideas about the same thing, so there is a product you can buy or sell to bet on it.
She asks her broker what price they can buy or sell it. The broker asks how much she wants and gives a price.
This conversation is so common that there is an agreed upon structure for it. Bloomberg parses all your conversations and provides you with an aggregated view of all quotes brokers have offered you. You can then chart/do whatever you want with this data.
> This conversation is so common that there is an agreed upon structure for it. Bloomberg parses all your conversations and provides you with an aggregated view of all quotes brokers have offered you. You can then chart/do whatever you want with this data.
I appreciate when a human interaction becomes so formalized that it becomes a de-facto API that computers can use. It would be funny to imagine a future where that interaction is happening between 2 chatbots and report results back to their humans.
One amendment: 20k means dollars per basis point, rather than dollars of notional. That is, enough notional that a 0.01% change in interest rates would cause a $20 000 change in the net present value of the instrument. Traders often think in these terms because it makes it much easier to compare across different instruments.
Also, if you tried to trade 20k dollars notional, dealers would tell you to get lost, because an amount that tiny isn't worth their time.
traded like this because it is a meaningful measure of risk regardless of tenor. also its the same whether you're doing bonds or interest rate swaps (or, rarer, options)
The chat rooms have really interesting features, like pinning and rich-embedding equity information that updates in real time. Also, you can "ring" the room with a bell, which was immensely entertaining as an intern.
Ringing the bell is grounds for expulsion from many chat rooms, at least the semi-anonymous chat rooms provided by Bloomberg and other sell sides shops. Apparently it is very annoying to certain people.
If you give a quote as a trader you typically give the other participant some time to answer you.
If the price moves against you since you last quoted, you typically say something like "off" and ring the bell so that the other guy knows that price is not good anymore. Fairly relevant when you're talking to a salesguy who is not looking at the chat, cause he's talking with his trader
Good question. I think of it as being equivalent to marking an email “high priority”. In my experience brokers would sometimes use it to call attention to a time-sensitive issue, eg confirming details for a trade settling today. Always thought it was annoying and if they had something really urgent they should just pick up the phone, but that’s just me.
Echoing another commenter, level of discourse is generally pretty low. In public chat rooms you’re more likely to get a wise crack rather than an actual response to any question. That said, you can still find some nuggets of wisdom.
