What do you think of this trade?

Discussion in 'Trading' started by tradingjournals, Aug 15, 2010.

  1. What do you think of Shorting 10 year bonds. Market is currently at 125'20, which is the current top of today (Sunday). What do you think is the risk, the reward and the probs?

    Is it a stupid trade, lousy trade, good trade, great trade, etc?
  2. you're shorting something at the very top while prices haven't really dictated or indicated a decline yet. even though their stalling, previous stalling took place around 122'16-122 that brought a decline to 121'16 before prices continued upwards.

    I would wait for a decline over 1'16 - 2 points before shorting. You might think you're giving up profit but really the thing blasted off on sept bot at 114. so if its top 50% retrace can get you atleast 3-4 points if you wait for a 2pt decline.

    maybe just put a small short position on it then load up when it drops more.
  3. no such thing as a lousy trade! I got short the ZN friday at the close just for a trade not sure if we'll get up to 128'000ish if we do I'll short again. I wouldn't be surprised to see ES and ZN drop at the same time. Cash is king! Although I guess that would make gold God.
  4. Thanks guys for the input. Futures are now at 125'25. 125'25 and 126 are round numbers for a resistance. 125'25 seems to be a good place where people would sell, and others would be scared to buy. What do you think?

    I like 125'25 as a top. Easy to remember.
  5. What is a good stop for a 125'25 short side entry? Please give your input quickly. I have to decide.
  6. Surdo


    126 01'
  7. Surdo


    How did that work out for you?
  8. Erm, today might not have been a great day to get into this trade. We might be hitting 2.5% yield on the current 10s and, as I keep repeating, have you seen where 10y JGBs are trading these days?
  9. Isn't JGB's mostly held by the Japanese, and US 10y treasuries mostly held by the Chinese? That ought to make a difference, right? (in terms of the willingness of the holders to "hold on")
  10. I don't know if it does make a difference, given that most of the Chinese savings are, effectively, USD-denominated.
    #10     Aug 16, 2010