Morgan Stanley Tips bet 'made sense', dealers say

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A good tip, after all?

An alleged short position in long-dated Treasury Inflation Protected Securities (Tips) is thought to have caused stinging losses for Morgan Stanley – it certainly resulted in a barrage of negative headlines – but rival dealers say the trade idea made sense, even if the size of the bet was too aggressive.

In late June, dealers say Morgan Stanley took a short position in 30-year Tips estimated at between $3 billion and $4 billion, coupled with a long position in five-year and 10-year Tips. Dealers

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