Is T-bonds also a viable day trading vehicle? Do the traders in this area(including TB, TN etc) more incline to position trading? Did TB also have any big shock history like the stock market in Oct 1987? Thank for any comment.
I assume your talking about bond futures ass opposed to cash. Yes they are a viable day trading vehicle and have been so for a long time. Tbond futures were the biggest contract for years before the cme rolled out the euros and now emini's. In february of 2000 the treasury announced they were going to curtail the supply of 30 year bonds and pretty much since then the liquidity has moved to the ten year contract. Treasuries will move like everything else and can have enormous volatility at times. My personal opinion is that they trend well.
I found the chart of TB last year. On 11th Sep, the daily high and low had only one dollar difference. It seems it is not as volatile as the indices. Was it not so senstive to external events?
Let's say a person has 1 mln dollars and wants to buy a 3 month zero-coupon discount bond. Is it possible to do it thru IB? If not, what would be the best solution?
A 3 month zero is simply a 90 day T-Bill. I don't know IB but I would imagine you could buy a T-Bill through IB. FYI: typically true zero-coupon bonds range in maturity from 8 to 20 years. There are a few outside of this range but not many. Regards, Dr. Zhivodka
Dr.Zhivodka Thanks for your reply. I will try to find out more about the current yield and availability of 90 T-bill @ IB. The idea is to get some "free" cash for options swing trading. I have a market neutral system-(the usual pair trading stuff) but want to apply some new tricks to it using options. Buying 90 days T-bill might yield me a few G's to play with. Best regards
Good question, not sure how Ib does it. Most futures brokers give 90% margin on tbills. In otherwords, If you buy 1m tbills, for margin purposes they consider $900,000 in your account to be same as cash.
In other words if I were to buy 1 mil Tbills, I'd only need 100K? In this case it probably doesn't make much sence cause I'd wind up paying more for the margin, correct? Or I'd still need 1 mln, but could use remaining 900K to trade equities/futures? My idea was like this. Buy 90 Days T-Bill (or 180 Days, or 1 year) for let's say 985K and use the remaining 15K for options. Even if the options idea doesn't not work out- I'd still have the million later. It can be two different accounts. One to buy the bond and IB for options. Any opinions?