Yeah swaptions would be nice but it seems like the minimum size is $1mm.
Why not just short-sell treasuries (e.g. TLT)?
Futures and options give you a lot more leverage than short selling. A $100k short position on TLT would be $30k of maintenance margin, compared to $7,400 for UB.
And banks and hedge funds arbitrage futures prices against the underlying asset, so trading futures basically gives you access to institutional interest rates instead of retail margin rates. Right now the rate difference for short selling on IBKR is ~5% for accounts <$100k and 1.25% for accounts between $100k and $1mm. Plus the borrow fee which is currently only 0.3% for TLT but would go up if lots of people start shorting it.
Yeah swaptions would be nice but it seems like the minimum size is $1mm.
Futures and options give you a lot more leverage than short selling. A $100k short position on TLT would be $30k of maintenance margin, compared to $7,400 for UB.
And banks and hedge funds arbitrage futures prices against the underlying asset, so trading futures basically gives you access to institutional interest rates instead of retail margin rates. Right now the rate difference for short selling on IBKR is ~5% for accounts <$100k and 1.25% for accounts between $100k and $1mm. Plus the borrow fee which is currently only 0.3% for TLT but would go up if lots of people start shorting it.
Buying TLT puts is worth looking into though.