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# Why is average price different from price bought for ZN?

Discussion in 'Financial Futures' started by helpme_please, Oct 28, 2018.

I am a complete newbie to fixed income futures.

Using IBKR platform, I just bought 2 ZN contracts (10-year US treasury note) at ask quote of 118'310. However, on TWS, the average price reflected is 118.971875.

Why does this discrepancy exist? I have never encountered such a situation when buying stocks and stock index futures.

Last edited: Oct 29, 2018
2. ### Handle123

Most of the Financials are not traded in pennies like in stocks. Some traded 1/32, 1/64 and even 1/128

http://tfc-charts.w2d.com/specs/

"Treasury Notes 10 Year TY HMUZ One half of 1/32 of a point (\$15.625/contract); par is on the basis of 100 points Points (\$1,000) and one-half of 1/32 of a point One U.S. Treasury note having a face value at maturity of \$100,000 or multiple thereof 1/64 (\$15.625) "

So when they quote '310, this is based on 32rds, but actually it trades in 64ths

and IBKR platform does converting to decimal form.

3. ### eurusdzn

They are equivilant , or close to it.
At \$1000 per point from 119 to 120 and if they tick in 1/64"s its about \$15 per tick.
If the contract ticks in 1/128 's then about \$8 per tick .
118'310, 118'312, 118'315, 118'317, 119'000 ...count to 32 and roll up to next point.
So, 31/32 = .96875 or. 118'310 = 118.96875

1/32, 2/32, 3/32, ......31/32....0
See the CME website for contract specs

4. ### eurusdzn

Dont read anything into the ZN of my handle.. Havent touched these in quite a while.

5. ### Handle123

Day trading Financials is like watching paint dry, I trade them but very long term approach of staying in them years and then dance option plays and spreads around them to make something waiting for movement.

Here a monthly chart going back to 1988, you can see when they move they move quickly and other times they just hang.

Last edited: Oct 29, 2018

If the process is like watching paint dry, I don't think they are suited for day trading. Maybe more suited for holding for weeks to months. What do you think?

7. ### Handle123

Comes down to your method and back testing. I use 60 minutes on some Financials, dailies on spreads and weekly on long term everything including stocks. But all been factored by back testing. And I hedge anything over 29 minute timeframes.

Good luck.

8. ### eurusdzn

Look at that last month or so of 1999. Huge.....Remember Nasdaq broke upside range in October and ran up to year end. That move is about \$14k per contract with margin of ......?
I would guess the ten over two was flat or inverted then. I would take that paint.
Fed must have reversed policy on a dime causing , at least, a bull market in short term treasuries.
Look at the two year for a home gamer to follow the fed reasonably close.(200k/contract, 128 ticks.
Any possible correlation to current events?....will Powell pause or have to reverse if this, unlikely IMO , gets bad. Of course market will probably frontrun and discount these events long before Mr Powell emails me or rings a bell.
However, the fed always tells you what they are going to do.
The fed does move markets.
Treasuries can trend.

Last edited: Oct 29, 2018
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