Day Trading Rate Futures

Discussion in 'Financial Futures' started by Real Money, Sep 26, 2019.

  1. Real Money

    Real Money

    Apparently my edge is actually better suited to ultra bond futures, which is quite a surprise to me! (very short term/medium term/day trader) So, just a couple questions to some of the more experienced guys please.

    1) What instruments are highly correlated to UB futures?

    I'd imagine there are a bunch of ETFs or rate futures that would be highly correlated besides the bonds, bills and notes. Maybe Eurodollar? Any bond indexes or something? Any hints or suggestions please. Maybe somebody could point me in the right direction to find correlated stuff.

    2) If I'm bullish on UB but want to spread off some volatility could I buy the UB/ZB spread? (buy UB, sell ZB). Would it be appropriate to sell UB, buy ZB if bearish?

    3) The leverage is insane on this thing. Why is the margin so much smaller for this than equity futures? Is there anything that trades with similar leverage and/or margin to UB?

    Any other tricks of the trade? Should I have the rate spreads on my workstation while trading this? Are these important to watch ZB/ZN, ZB/ZF, ZN/ZF? Should I be watching the Eurodollar outrights or spreads?

    I have basic understanding of bonds but nothing too crazy. I'm definitely not at a professional level when it comes to interpreting news or complex rates space nuance.
    Last edited: Sep 26, 2019
  2. Cannon_Trading

    Cannon_Trading Sponsor

    I like the ZB and UB as well as the ten year futures. Nice instruments, "better trading for my taste". Not just that, overall trading fees should be lower as the exchange fees part is one of the lowest.
    Normally if bullish, buy UB sell ZB or even ZN pending how aggressive you want to be.
    Watch stock indices, many times there is an inverse relationship, stocks go up, bonds down and vise-versa. At times direct correlation with gold as safe haven.
    Definitely be aware of the diff. economic reports that come out, some of these reports can really move the rates sector.
    CALLumbus and Real Money like this.