Anyone here trades the yield curve? I am just starting and wondering if there are dedicated forums like reddit or facebook groups for yield curve traders. Specifically talking about trading the FYT, NOB etc.
Not the shape of the curve itself in spreads, one has to develop an economic outlook. But ZT ZN ZB are popular. Shorted ZN last two years when rate hike was a thing, just over 10k profit. Now I am not sure if the rate can move fast. Long TLT is probabaly better after another 2 hikes.
Pick up a textbook in interest securities first. Most traders play the yc by betting on central bank actions.
Did you trade in pairs? I am talking about trading NOB and FYT in pairs not just doing a binary bet on futures.
Never pairs unless it is call or put spread unless it is index or stock. You heard these big whales trading curves that is because they can commit large amount of capital and bet against central banks, AND it is not their own money to begin with. This paper is 101, I'd rather build the setup myself. Anyway, it is a market mostly decided by central bank rate. You can guess 2-10 spread would be wider or narrower by the end of this year but it is considered binary anyway when you enter a position. https://www.cmegroup.com/trading/interest-rates/files/Yield_Curve_Strategy_Paper.pdf I shorted ZN from Septembe 2021 at 134ish now it is at 113ish, lot of money on the table if you are right. I may go long with TLT or ZT in Q4, let's see.
Have you tried day trading the yield curve using margin? I imagine the 2-10s do not normally have high volatilities intraday.
The idea of intraday trading bonds is beyond me. Bond essentially is time value of money, you are betting time passage, not enough time then not enough money earned. CME products are already leveraged, ZN face value is 100k, you can get in the position for 2k maintenance margin, don't ask for more leverage please.
you are right the leverage is sufficient for most people trading the yield curve. The way I understand the day trading of YC is to look for deviation from the curve, bumps that sticks out of the curve will eventually get flattened.