I remember lending a friend money & telling him he could just pay me back in cash or if he ever found someone selling my own IOU for less than its face value he could buy that instead & hand it back to me same debt cleared cheaper for him. Thats basically what caught my attention reading how @TermMax lets borrowers repay debt recorded in the GT. You have got 2 paths:
PAY BACK THE EXACT AMOUNT OF DEBT TOKENS OWED OR GO INTO THE OPEN MARKET BUY UP FT & RETURN THOSE TO CLOSE THE POSITION INSTEAD.
What makes the 2nd option interesting is that FTs typically trade below face value before maturity so a borrower who times it right is not repaying dollar for dollar they are repaying at a discount simply because the market priced that FT lower ahead of maturity. Its a clean mechanism on paper letting market pricing do work that would otherwise just sit as fixed debt. But i keep wondering how thin that discount actually gets once liquidity tightens or maturity gets close does the opportunity mostly exist in calm condition or does it hold up when things get volatile too ?
#TermMax @TermMax $TMX
$ACE $CLO $ALPINE
PAY BACK THE EXACT AMOUNT OF DEBT TOKENS OWED OR GO INTO THE OPEN MARKET BUY UP FT & RETURN THOSE TO CLOSE THE POSITION INSTEAD.
What makes the 2nd option interesting is that FTs typically trade below face value before maturity so a borrower who times it right is not repaying dollar for dollar they are repaying at a discount simply because the market priced that FT lower ahead of maturity. Its a clean mechanism on paper letting market pricing do work that would otherwise just sit as fixed debt. But i keep wondering how thin that discount actually gets once liquidity tightens or maturity gets close does the opportunity mostly exist in calm condition or does it hold up when things get volatile too ?
#TermMax @TermMax $TMX
$ACE $CLO $ALPINE