Yoga position? Berlin-based EDM collective? Nope. It's a weirdly shaped yield curve (a phrase that, on its own, could make a good name for a Berlin-based EDM collective...we'd get up and dance for Weirdly Shaped Yield Curve).
A yield curve tracks the rates paid for various bonds based on maturities. Normally, longer-term bonds pay higher rates than shorter-term ones. In other words, you're going to get paid a higher rate to own a 30-year bond than a 2-year bond.
A positive butterfly is an unusual situation where both short-term rates and long-term rates increase faster than medium-term rates. So the two ends of the yield curve move up, but the middle lags behind. (The ends make up the wings of the butterfly; the middle represents the body).
A negative butterfly represents the opposite situation: short-term and long-term rates drop in relation to medium-term rates. Both the positive and negative butterflies are considered non-parallel yield curve shifts. The name comes from the fact that the changes don't manifest evenly across the yield curve.
Related or Semi-related Video
Finance: What is the Arms Short Term Tra...13 Views
finance a la shmoop what is the Arms Short Term Trading Index not to be
confused with the short arms term trading index a run by this guy all [Man with dinosaur for a head sitting at a desk]
right Richard Arms invented it in the 70s and then a journalist cleverly
renamed it Trin.... short for trading index very clever
yeah well Trin as in Rin Tin is just an index for the advanced decline ratio in
the stock market and if you haven't seen our video on it oh well you should we've
had George Clooney of fortune so directed the computation of the Trin [George Clooney directing a show]
looks like this Trin equals advanced issues divided by declining issues all
over advanced volume divided by declining volume....
So note that this equation maps volume as an element of the computation so it's
meaningfully more useful than just the vanilla advanced decline ratio and hey [Man discussing equation]
just keeping it real their advanced decline ratio we love you but you're [Advanced decline ratio laying on sofa eating doughnuts]
just not as good all right well so if we compute things we get a value of 1 and
well that's good or rather a bullish sign that the market "wants to go
up" above one is bearish and at premiums of 30 40 50 percent ie [Bear walking by a river]
calculations of 0.5 very bullish to 1.5 very bearish well those are signs that
have been validated by actual market performance over time well why would we
care about this calculation in the first place, well if we get the answer right as [Man staring at a crystal ball]
to where the markets going well you know we can make a fortune
yeah ask Warren Buffett... [Warren eating dinner]
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