Summary of the Podcast Episode

In this podcast episode, Kevin Muhr welcomes back Harley Bassman from Simplify Asset Management. They discuss two new strategies, the TUA and the MBTA. They also reflect on the success of the PFIX product that bet on higher 20-year rates. Bassman explains the concept of positive convexity and why it was a winning trade. He then introduces the MBTA strategy, which involves buying mortgage-backed securities and shorting volatility. Bassman explains how the mortgage market works and why certain mortgage bonds are more attractive than others. He proposes selling the mortgage index and investing in new bonds with higher yields and shorter durations. Furthermore, the podcast explores the TUA strategy, which leverages two-year futures contracts. The conversation touches on the inverted yield curve, potential Fed rate cuts, and the benefits of the levered two-year ETF. Bassman sheds light on the trading opportunities offered by the TUA and discusses the role of ego and legacy in the Fed's decision-making process. He concludes by emphasizing the timeliness and potential of the TUA trade.