Question for bond futures traders

Discussion in 'Financial Futures' started by Sponger, Feb 24, 2007.

  1. Sponger


    What are the main US bond futures contracts you trade?

    Which are the most actively traded / liquid on a daily basis? Top of the list is 30 year bond, but what order do they fall in after that?

    Does anyone trade the 30 year and a shorter time frame to play the shape of the yield curve?

    Suggestions anyone?

    Also, anyone trade fed funds futures?

    Thanks all!
  2. 10year is the benchmark... it actually has the most volume

    you can do a 2/5 spread

    just about anything you want....

    curto would know bout the options on those, he's there on the cbot floor...

    but for the most active, at least in the cash market, the 2y's have been rocking in terms of dollar volume traded on icap...

    2 and 10 would be a good place to look... and the 2/5 curve has been inverted for a while, with -10 being the resistance, and it's well off the lows of the -19 inversion we saw...
  3. correction... the spread action for yield curve is actually not so much on the 30y per se, it's at the 2/5/10 level.
  4. Sponger


    Thanks ChiBondKing, that's exactly what I wanted to know!
  5. cstfx


    If you are daytrading, then obviously you want the intrument with the greater volatility, and that would be the 30 yr. If you're spread trading, then Chi-king is correct, go with the 2/5/10s.

    When the 30 yr was the benchmark years ago, there were bond daytraders galore. After they switched, the volume wasn't there anymore to support the players, and many daytraders looked for something else. Even tho they have begun to reissue the 30 yr, its daily is still below that of the 5yr. If they keep issuing the 30 yr maybe volume will pick up as well and it will be the 90s all over again.

    (Why they don't issue 30 yr bonds at 4.7% or lower like 2004 instead of 10 yr which may or may not go up over time is beyond me. They should lock in the long term rates while they can and save us some money.)
  6. Sponger


    Issuing 30 years at such low levels would be the intelligent move - but when does anyone in government ever do the smart thing :p

    You're right about trading vehicles.