I don't have much experience with futures, but I was looking at CME's website on how much volume is traded with every expiration month, and it looks like there is no volume for ZN/SEP2020 and ZN/DEC2020. https://www.cmegroup.com/trading/interest-rates/us-treasury/10-year-us-treasury-note.html I tried to buy 1 contract ZN/DEC2020@ECBOT on my paper trading account at IB and nothing happened. Market order stayed in blue color (transmitted, not yet acknowledged). What is going on? I thought you can buy every expiration month available with high liquidity? I also tried to buy 1 ZN/JUN2020@ECBOT and this one was filled immediately!
I'm not entirely certain but for futures that trade on quarterly cycles, like ES or ZN, I think you can only trade the FRONT MONTH.
If there is no volume, you won't get a fill. If you put a bid or ask out there at a price point on ZN December, someone may take your trade. Then you will have added liquidity. To answer your main question, just look at the specs... You see how you have a list of 3 quarterly months? Specs, specs, specs.
Thanks. But how it's possible that SEP2020 and DEC2020 almost have no volume? Does nobody trade those months?
Incorrect. You can trade contracts which are not the front month. But you need a counter party. If there isn't a counter party you won' be able to close a deal.
Hmm, the bond market being much larger than the stock market, it's hard to believe there would not be a counterparty. Anyway, I've always traded the front month, so this is all new for me. Speaking of which, why would anyone want to trade a back months anyway? They're illiquid and you most likely will end up paying a higher premium. Even worse, they don't move tick for tick in tandem with the front month contract.
You just answered your own question. Because everyone thinks like that..."Why would I want to trade a back month" (and you mean forward month, but we get it.). So that's why. Everyone thinks it is illiquid, so they don't trade it, so it becomes illiquid. Self-fulfilling. Don't you dare say that to the energy markets though, like CL. Volume pR0n!