advantages/disadvantages trading TBond, 10 Yr or 5 Yr Notes ?

Discussion in 'Financial Futures' started by Wallace, Mar 26, 2013.

  1. wondered if there was any difference between them, one over another
    I see the 10 Yr has the highest volume and 5 Yr lowest margins and tick value
    they appear to have similar price formations

    why do you trade the one you do ?
  2. spd


    spread em
  3. I'm taking a big hit by not spreading on yesterday's transactions. I thought the risk/reward & probability was in my favor to short the ZB (30 yr Bond) & ZN (10 yr Note); however, the ZB is rallying so hard that I'm losing money faster than I can stomach.

    Although it's true that "the market can remain irrational longer than you can remain solvent", I was convinced that the market is generally healthy and interest rates simply cannot remain this artifically low for an extended time... Hopefully, I won't be carried off on my shield...

  4. ofthomas


    If you were short before yesterday, you will be enduring quite a bit of pain for a while... I spread US/TY/FV and I would not be shorting them outright... the bias on rates has been bullish since the beginning of the month... I just wouldnt be short on rates right now... never mind a shield, they might not find your remains... I would suggest you buy the back month to ease some of that pain... just my opinion... evaluate your trade and figure out what is best for you...
  5. ofthomas


    ZB/US = Full Tick
    ZN/TY = Half Tick
    ZF/FV = Quarter Tick

    I spread them, though a lot of people trade them outright...

    my advice, if you are going to trade something, learn about it... a good book is Interest Rate Markets: A Practical Approach to Fixed Income ... It will explain a lot.. asking why someone might trade them wont help you given you will not have the same "make up" as the person that you are asking..

    just my 2 cents..
  6. LVMises


  7. I shorted the ZB at 146... I wish I waited to 148 before shorting it... I'm thinking about adding to my short position if it gets to 150... I also sold a call at 150...


  8. ofthomas


    hmmm... GRI global trader service report for bonds... I use their service, it provides me with another point of view against my own... IMO, well spent $$$....

    The market is bullish, accelerating rallies late last week and creating a swing target to 14818. Trade is poised for continued aggressive rallies to stretch for 14818. A close over 14818 creates chances for a climb near 150. Be careful for a setback from 14818+/- on the first test. Any corrective dips that hold within Friday’s range will keep strong bull forces. A close under 14509* is needed to signal a peaking turnover.

    1* Market is challenging a previous contract high and may attempt a breakout. Closing beyond 149.23 calls for continuation rallies. A failure around 149.23 cautions for a reactionary setback.

    2* Historical analysis of this minor swing pattern shows a definite bullish bias for today's action, with the odds of this market taking out yesterday's high in the next two trading sessions around 71 percent.

    3* The directional rally shows a strong probability for a corrective dip today below 147.15.
  9. I figure that I'll have time on my side... interest rate simply cannot remain this low forever... the moment any rumors about the Fed pulling back on monthly mortgage purchases, rates should rise...

    I hope that I will have the patience to hold on to my short ZB position for the next 3 - 6 months, if that's what it takes...

  10. The time is on my side narrative is generally a "hard biscuit " as my British friends would say. For those with the capital taking a small (say 20% position) and then scalling in as it rises with a real cushion behind your full position (I'm not advocating a Martingale!!!) is a valid approach.

    But if you put on your full position or even a half position or don't have a good bit behind you the time is on my side mantra (and it does become a mantra) is not trading ... it is hoping. Is there anyone who thought this bond rally would ever go to this extreme? Certainly not I.

    #10     Apr 8, 2013