Shorting Treasuries at Interactive Brokers

Discussion in 'Retail Brokers' started by nravo, Mar 5, 2009.

  1. nravo


    At IB, you can, apparently, short Treasuries, actually Treasuries, not futures, with as small a lot size as 1. (And at the opposite end of the risk scale, margin requirements of 1 to 6 percent).


    When I tested a trade, my order confirmation said on a bond priced at 122, I receive $122. How is that? The bond was $1220. Is there some bond shorthand here I am missing? Some odd bond accounting? The principal isn't reported or something?

    Finally, which bonds should I short? Long term or short term. And if I short a 20 year at say 122 and have to pay out 1 percent interest or whatever the coupon is on a 20-year, then do I only make money with price, meaning short-term. Forget holding for 10-20 years and waiting to plummet to or below par? Is below par a possibility?

    Can you only make money this way if you leverage up?

    Having a hard time finding retail traders who do bonds, not bond futures.

    Any bond traders out there?
  2. moo


    Sounds like you should not be shorting bonds...
  3. nravo


    How else does one learn? Ask questions. Try with very small lots. Take some losses. UNfortunately, there is little on the web or on Amazon about this that's aimed at Treasuries, shorting and retail investors < a few mil.
  4. Buy puts on TLT , same crap.
  5. I spent alot on bond books-

    The best one for begineers is Christine Ray's "The Bond Market"

    You should probably trade various inverse long bond funds so you dont lose your shirt first.

    There is TLT ETF you are probably best suited for, and a Rydex inverse long gov bond fund.