Considering Trading Treasury Bonds Futures

Discussion in 'Financial Futures' started by orderbookacolyte, Nov 24, 2019.

  1. I have been considering getting into trading treasury bond futures using depth of market/order book, but I am having some qualms about whether it is the right path.

    I have a little over $3m and I am in my early 30s. I am a corporate lawyer (with lots of finance experience so I have a decent grasp of finance although not much experience with derivatives). But I don't want to stay in this field. But given my young age and the family we're starting (one kid), I can't just leave my job....I don't have enough money to essentially retire....I need to bring in some income. That is why I became interested in trading.

    But I could just invest some money into a hedge fund or prop fund trading treasury bond futures using depth of market who are probably a lot better at it than I could ever be (OTOH the funds charge fees). There is also the question of whether that is the best return that I can get with that money. I have financial advisers and hopefully they are picking good investments and are more capable at doing so than I am.

    So it really only makes sense for me to pursue trading treasury bond futures if I can reach the point of (i) making a pretty sizable amount of money each year (say $100k pre-tax) and (ii) making a pretty high ROI (so I make that $100k using a pretty small amount of capital...maybe $200k or even less if possible). I have no idea whether these things are realistic. I know it would take awhile for me to become good. And then I know that I would be up against algos. Personality wise I think I would be well suited to trading but I can kind of tell that it probably is not what I am looking for.
  2. Real Money

    Real Money

    Right off the bat, Ultra Bonds are my favorite rate future.

    This really depends on what time frame your gonna trade, and what duration instruments your talking about. The back of the curve is dominated by speculative order flows and the front of the curve is where serious pro's are operating.

    This is, on the whole, a very efficient market from what I am seeing.

    Re depth of market/order book....

    OTR cash Treasuries, GovPix, Brokertec, and Conversion Factors

    are what the pro's are using to get an edge in the cash market according to my sources.

    I don't have these data feeds yet but it seems like the logical next step.

    The only thing that I have found (and this is where I engineered an edge) is that the bond traders and algo shops running $ generating trading ops in long duration rate futures have trouble guessing the next move in the index (sometimes).
    .sigma, comagnum and TooEffingOld like this.
  3. minmike


    Tough game at this time.
    Real Money likes this.
  4. dozu888


    if there isn't another income source then $3m is a bit low... even though you can expect 12.5% on the qqq there is the volatility.

    for $100k why not keep doing corporate law... at $200/hour you only need 500 hours that is like working 1.5 days a week.

    making $100k from $200k capital? this question alone tells me you aint' gonna do it...

    in another thread I posted Fidelity has 168000 401 k millionaires and only 1 (so far) raised hand that he's made it as day trader (no verification of course but who cares lol).

    I'd just focus on the law and build up the portfolio to around $5m that should be enough for a moderate retire..
  5. You could do research on decent CTAs who have low risk and over long run have a steady decent profit.. of course there is more risk than researching value stocks....there is leverage and thus you can get away with notional funding.. (i am not selling anything but i have a few such accounts).. look at
    You can do your own research
    Bum likes this.
  6. ZBZB


    Trade the bond options. Very possible.
    Real Money likes this.
  7. He's got an expensive wife sounds like. 3 million just DRIP it. Lots of quality 5% yield out there, recently JNJ had a good yield be patient.
    lindq and Real Money like this.
  8. comagnum


    The bonds trend well, often the swings are 40+ weeks. The last swing low-to-high made on the UB was $52,000 (1 contract).

    With swing trading you can keep your day job. The opportunity cost of losing income from your profession especially when you have a family has to be factored in. The few profitable futures traders typically hit their stride at 5-10 years. The learning curve always takes longer & cost a lot more than most can handle.

    Not trying to discourage you - just suggesting progressing carefully into it. There are many washed out traders that can only dream of being a lawyer.

    Ultra Bond swing Dec 7, 2018 - Sep 6, 2019
    Last edited: Nov 24, 2019
    Real Money likes this.
  9. MrMuppet


    @orderbookacolyte: Sorry to break it to you: You have zero chance of making money, ZERO.

    Until you are good enough to make consistent income, you will need 3 years of everyday screen time, with a mentor perhaps 2..and then another 2 years until you can match what you are making right now.

    Why does everyone think you can just come in here and trade.
    Corporate lawyer, are you kidding? Compared to the amount of stress and workload you have to handle as a trader will make your current job look like a picknick.
    No weekends for at least one year and 16 hour workdays my friend.

    You'd be stupid to leave your current profession.
    dozu888 likes this.
  10. dozu888


    I’d double like this if possible.

    Why do people like to pick the highest hanging fruit. Quit $200/hour job and come day trade like them losers living in their moms basement.

    Even in trading. Proven nobody can beat the qqq. Yet people want to sweat all day to scalp for 25 cents.
    #10     Nov 24, 2019
    nooby_mcnoob likes this.