Anyone here experienced with trading SOFR futures?

Discussion in 'Trading' started by tonyf, May 19, 2022.

  1. tonyf

    tonyf

  2. Nobert

    Nobert

    Buying futures in order to hedge from inflation with no experience, while considering that to be a safe place.

    Don't do that.

    Stay on cash, less problems.
     
  3. bone

    bone

    We’ve been spread trading SOFR’s the past several months as liquidity improves. Doing it exactly like Eurodollar and Eurobond futures spreads - butterflies and condors mostly.

    From my experience, most novice hedgers are actually compounding their risk profiles. As Norbert mentioned, to correctly “hedge” requires extensive experience and modeling expertise. I used to hedge commercial power and fuels.
     
    Nobert likes this.
  4. tonyf

    tonyf

    Or just learn perhaps? How about that for a change?
     
  5. MrMuppet

    MrMuppet

    I don't think you have time and the resources for that. SOFRs are mostly traded by commercials so your counterparties are full time wizzkids.
    Pricing and modeling is really complex and you should not expect any "free tools" to do that for you. STIRs in general are a shark pool of professionals and HFT prop - shops so you better prepare yourself before you jump. Online resources, news and information are really rare, so unless you're willing to spend either a couple of grand on education or a couple of months on learning math and coding, I don't think you'll have a fair chance.

    They are NOT a safe place to store cash. Look into inflation linked bonds (ILBs)...I'm sure there is an ETF for that :)
     
    bone likes this.
  6. bone

    bone

    Go for it. You’ll love the convexity.

     
  7. tonyf

    tonyf

    2k on education is fine by me. Any resources in mind?
     
  8. Nobert

    Nobert

    I didn't mention that as an option, since, it comes by as a default solution & as an answer to any problem out there.

    Good luck to you, if you choose to do so.
     
    Last edited: May 19, 2022
  9. "learning" in this market takes a Harvard like tuition cost...
    learn when we have a normal market.
     
  10. MrMuppet

    MrMuppet

    @bone
     
    #10     May 19, 2022