PACAM Treasury Trade
A US treasury sales person at Megabank gets a call from his client PACAM (Perry Allan Carter Asset Management). PACAM asks the sales person, “Where is the market, in size, for the 5-year on-the-run treasuries?” This question has a lot of information built into it, so let’s break it down. “Where is the market?” means that the client wants the bank to make a market. Making a market means that the trader needs to put a price (a bid) where he will buy something and a price (an offer, or ask) where he will sell. This is the trader’s market for a particular product for a particular size. It is also called a quote. (See Table 4.2.)
TABLE 4.2 Making a Market in Different Asset Classes
| Asset class | Market and what it means |
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