#termmax @TermMax
The more I read about @TermMax the more I think the secondary market matters almost as much as the original lending market.
Why?
Because FT isn't necessarilymeant to sit untouched until maturity.
It can be transferred and traded before then.
That gives holders another option.
But an option is onlyuseful if the market is liquid enough.
I was thinking about this while reading the FT mechanics and realised the fixed claim itself is only half the story.
The other half is price discovery.
What does the market think that future claim is worth today?
How much does the remaining maturity matter?
What happens when broader interest rates move?
Those questions turn a simple fixed claim into an actual financial instrument.
That's why I'm more interested in the market around FT than just the headline rate.
Liquidity will tell us a LOT.
#TermMax