Replies to post #618409 on Fannie Mae-No Politics (FNMA)

[kthomp19]

Can smb please explain why there is such big difference between FNMA and FMCC short levels ?

My guess is that FMCC usually trades at a small discount to FNMA (3-7%), so when it trades higher than FNMA some people put on a long FNMA/short FMCC pair trade, expecting a reversion to the historical mean.