While on my last day on an internship last summer, I heard on the morning call a UK rates trader say something along the lines of: "Most of the curve is at fair value at the moment, so nothing particularly interesting in the way of trade opportunities".

How do traders determine that the curve is at fair value? Is there a general approach to doing this? Or do traders develop their own models for determining it? Can traders disagree on whether or not a curve is at fair value?

What are some good places to learn about determining this?

  • $\begingroup$ Until shown otherwise you should assume this guy is an entertainer who is paid to make amusing remarks about Fixed Income, but does not know any better than anyone else what is going on. If you analyze his track record and find it has some predictive value, then things change and you should listen to him, ask him his methods, etc. $\endgroup$
    – nbbo2
    Nov 22, 2017 at 16:42


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