@TermMax #TermMax
Everyone asks, “what rate can I lock on TermMax?”
But I started thinking about what comes after the trade:
what happens when I want out?
A fixed rate solves the entry problem.
It doesn’t automatically solve the exit.
Before maturity, the position’s value can change with secondary-market depth, time to maturity, demand, and market rates.
So 6% vs 4% isn’t the whole trade.
The more interesting question is:
what happens to that fixed-rate position when you need liquidity?
The rate may be fixed.
The exit isn’t.
Everyone asks, “what rate can I lock on TermMax?”
But I started thinking about what comes after the trade:
what happens when I want out?
A fixed rate solves the entry problem.
It doesn’t automatically solve the exit.
Before maturity, the position’s value can change with secondary-market depth, time to maturity, demand, and market rates.
So 6% vs 4% isn’t the whole trade.
The more interesting question is:
what happens to that fixed-rate position when you need liquidity?
The rate may be fixed.
The exit isn’t.
