yeah, I get it.. I don't know why i thought i'd be making a levered interest rate through the futures.. Its all a future bet on terminal spot when buying the individuals..
Option trader here. I recently read Aikin and just started Burgdhart's ED handbook (thanks to this thread). I was excited to trade STIRS, since Aikin made them sound so appealing. But I am disappointed to learn that this genre is ill-suited to retail (particularly retail trying to make a living). I have enjoyed studying this and planned to continue a great deal, but if I understand correctly, perhaps my time is better spent focusing on options. Obviously there are different viewpoints in this thread, could it be that STIRs are a great product in Europe, but unideal for most in America?
Short term interest rate trades aren't necessarily European.. You can make money trading Stirs.. It broadens your understanding of the market.. Which is edge in itself.! Plus its a low vol trading style
it's not whether they're european/american (euribor/eurodollar), it's the location where you can have success trading them. seems like in america that unless you work at a reputable prop firm, it is not advantageous to trade them. however in europe, it seems that retail has a much better chance of success.
It depends on your style, really... To be able to do the full array of stuff, you do need access to some prop-like tools, in Europe or US. If you just wanna do very basic things, you can do them in a retail context.
Well, let's say you believe Bill Gross and you're convinced that rates won't rise until 2016 or smth... You could just buy, I dunno, some Sep15 contracts and hold them until Sep 2015. Or something similar with FedFunds, which would be cleaner.
That's a bit harder, given what's priced in. There are things you could do in options, I suppose, but there's definitely going to be more risks and complications with those.