Originally Posted by
AF OneWire
Forgive my ignorance, but doesn’t this just affect that one day or does it somehow cascade through the rest of the month. What is the advantage to the company of protecting the 29th more so than other days throughout the month?
Assuming the coverage is more than 5 days more on all other days of the month, it is cascading to the extent that it prevents all trades involving the 29th. So if you have a trip on the 29th, there is no way to get rid of it, other than trading something with the exact same footprint. The advantage to the company is that any trade involving carryover is guaranteed to not alter coverage, unless someone were to call in sick.
The last few days of one bid period and the first few days of the following period are typically the tightest on reserve coverage due to the inability for lineholders to trade across bid periods.