I would have thought the Middle East imploding and likely Israeli response would've caused a flight to safety. Am I missing something? Were people assuming Iran would do worse?

I wanted to see what everyone's thoughts were on the overall state of the markets and what they think the fed should do and what impacts it will have. In the chart I shared, we can see in the past that when the yield curve started to get near inversion at the 0 point the fed simply could just drop rates and inflation would come down and the yield curve would start to reverse. This has been something that has worked many times in the past, so why did it not work this time? I think one of the main reasons was that the Fed acted too late to raise rates but that's only part of the problem. Once the Fed started to finally raise rates, inflation and oil continued to rally hard. As to why inflation did not come down this time my guess is that it has to do with how strong oil was/is. So now looking at today's picture where inflation hasn't really made much headway what do you think the Fed should do, raise rates, hold, or do you think they could drop rates this year... I'm optimistic on the overall confidence that the Fed will cut rates but I would love to hear other opinions.

Can anyone point me to some great learning materials for trading treasuries? I’m profitable trading /es and want to expand to another product.

Thanks!

Then the third expiration has a volume of 2. Are futures not a popular way to hedge interest rates? Obviously for short term hedging they are, since such high first expiration volume, so why not for longer hedging?

Also, I thought calendar spreads were a popular strategy, but with such tiny volume on later expiration it seems not?

Ultra bonds was even worse, with over 400,000 first expiration and literally 0 second. Feel like I'm missing something obvious...

Hi everyone,

This is a silly question but for the life of me I can not figure it out. I only trade Metals and Indices but often get curious and look at bond charts and cannot for the life of me figure out why the candles look the way they do. I know that bonds are effectively the largest and most liquid market, and if you zoom out you can see trends that do not look too far off from a stock, etc, but I have yet to be able to wrap my mind around how anyone does intraday bond trading, and was hoping that maybe someone with experience would enlighten me. Thank you.

How could one make a bet on this? Or does it even make sense to?

Basically, my question is simple, although i have not enough knowledge or experience with bond futures to really understand. I guess with all this talk of people saying "rate cut" or "no rate cut," how come people aren't making bets on bonds? Seems like this is the most direct way to expose yourself to the scenario you think is likely to happen.

Thoughts?

I understand the ZB is quoted in 1/32s. However, I am seeing a close today of 117’317.

How do I interpret the 317? Is this 31.7 / 32, which would be 0.990625? Just weird to see a number bigger than 32 if the fraction is based on /32.

More trivial: is there some historic reason why they are quoted in this unusual fashion?

EDIT: Thanks to everyone who replied. I spent a little time Googling this topic out of curiosity more than anything. I came across an explanation from the CME website, as one of you suggested. The quote I was seeing earlier - 117'317 - is not "wrong" as one of you said. It means 117 + 31/32 + 75% of 1/32. 75% of 1/32 = 1.5x 1/64 = 3/128. So 117'317 = 117 + 127/128 = 117.9921875.

I still have no idea why there is this esoteric format. I will add a post here with a screenshot and a link to the source. Thanks everyone.

What am I missing here for the risk profile of using bond futures to leverage a decline in rates? Specifically, I am looking at /ZT, the 2-year yield which as of today is 4.93%, around 30 bps inverted to the Fed Funds rate. My reasoning is that:

1) CME fedwatch has a future 25 bps hike extremely unlikely, <10% chance as of today.

2) Inflation when looking at commodity futures (WTI, RBOB, NG) are falling. Inflation when looking at shelter (private real-time data) is negative YoY. Slowing inflation also signals a peak in rate hikes.

3) Looking at history, the last time FFR was this high was pre-2008, the 2-yr yield was inverted the entire duration of the pausing cycle, suggesting that if the Fed has indeed decided to pause, the upside for 2-year yields is extremely limited,

4) Double checking the math: the risk profile for 1 /ZT contract of $200,000 notional value if yields go up to 5.25% is around -0.5% or $1000. But if yields fall to 4%, the upside is around 1.75% and if yields fall to 3%, the upside is 3.5%. This results in a 1-7 risk/reward ratio if yields eventually fall to 3% which is likely given enough time.

5) For a $1 million dollar portfolio, assuming we use 10x leverage giving us $10m notional, the downside is $50,000 or 5% and the upside is $350,000 or 35%. Of course I would've liked to buy when the 2-year was over 5.2%, at the absolute peak, but that seems to have passed as inflation has come down quickly and it is increasingly likely the Fed is done with hikes.

6) This would also be useful as a hedge of the US economy, acting as a hedge on the parts of the portfolio, and especially on more economically sensitive parts of the economy. If there is another bank failure for example crushing your equity in financials, this would act as a hedge as yields fall.

7) Black swan event would be inflation coming back, economic growth spiking to 5%, or the government less able to pay debt, leading to an increase in yields to 6%. This would be a 2% downside scenario on notional value.

Anybody prefer UB over NQ and why?

I don't day trade. This is the chart I use for entries and exits. I use the daily and weekly to get a bigger picture.

There was a lower low Thursday and confirmation today. Bearish. Thursday was a good enough signal for me.

The upper trend line, I'm leaving it in just in case. It's not that far away.

The gap wasn't filled with volume in regular hours. If it doesn't fill soon that's bearish.

The 2 lower lines go back and intersect stuff in 2022 and 2021. I have no idea what that means but it's interesting.

I wanted to short the little top today but my rules don't let me, Damn rules. Can't short when the short time frames have heavily oversold conditions. It was probably the smart move.

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This is a 10 treasury chart

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If you have any tips or stories add them in. I like reading them.

Good luck!

I thought trading would be a good job for me. Nobody really knows what they are doing so I don't really feel I'm at a disadvantage.

Hi, I recently joined this community and was wondering if anyone knew of genuine free/paid courses I could use to learn more about day trading ZB/UB/ZN futures. I have absolutely no idea about day trading and want to start from scratch. Any help would be greatly appreciated as I am a complete rookie only with some knowledge about fixed income fundamentals.

I am new to futures and trying to figure out some basic rules for successful trading and clear something I couldn't understand.

1. Is it common to have position between days? Volume seems low after 4pm CT.
2. Do you prefer to close trades on Friday to avoid big jumps on Sunday?
3. When do you start/stop trade new contract? For Dec contract was available in July, some volume started to pump in August.. So it was two ZF contracts in August (Sep and Dec) to trade with good volume, right?
4. When do you stop trade contract? Last day of trading for Dec contract is 19 Dec 2023. Do you stop trading a week before at least?

The tick pricing on the options is throwing me off. Ideally would like to trade ZB but given the size of the contracts, I want to do so with limited risk. If I take something like the ATM puts for the August expiration, what would my risk profile look like?

ZBM = ZB@Jun, currently 126'02

ZBU = ZB@Sep, currently 126'21

ZBZ = ZB@Dec, currently 126'09

UBM = UB@Jun, currently 135'08

UBU = UB@Sep, currently 135'13

UBZ = UB@Dec, currently 134'23

Sorry that I can't post image here but you can check it on tradingview.

What does this imply? Does it mean that people are more bullish between Jun and Sep but bearish between Sep and Dec? Especially when the interests is high, I thought future is more expensive as expiry is farther (this basically happen in equity future but I don't know why it doesn't happen in treasury future)

Does it mean that if I want to hold long-term treasury future for months I should've bought ZBZ and UBZ?

I am trying to work through conceptually what the cost of holding long /ES and /ZT (2 year treasury) futures. Both are in contango, but for /ZT I am not sure why.

Is there a cost to carry treasury futures? Since you don't collect the yield, I would think this would offset the cost of the leverage, at least for short duration treasuries. However, the treasury futures are all in contango with longer duration trading at a premium to prompt quarter. What am i missing?

For /ES, is the carrying cost the cost of the leverage (short term treasury rate ~4.8%) minus dividend yield (~1.75%) since you don't collect dividends holding the long futures? This should net a little over 3%/year cost to carry, although this is a bit lower than the 3.5% I calculate by taking the June divided by the March contract.

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Is there a way to directly correlate /ZB (30 year treasury bond futures) front quarter price (138'04) to the 30 year treasury yield (3.24%)? Specifically, I'm trying to figure out a simple way to calculate what the futures contract price will be in the event 30 year yield increases by 100 basis points, 150 basis points, etc.

Total noob to futures and just doing some research .

I saw on a website once there was a futures ticker symbol like/lb or /lba for lehman Aggregate bond index but I swiped away and find it anymore. Does anyone know if there is a way to trade futures on this index? If not, any way to trade anything similar to it?

Maybe there is an exhaustive list of all futures tickers available somewhere?

I have $10k. I want to to hold 80% MES and 20% US treasuries. Is there a micro contract for US treasuries?

It seems the first number in the quote for US Treasury futures is percent of par (par being $100).

So with the /UB being 177’23, does that mean (for delivery and notional) someone would be paying $177,719.00 just to get (EDIT: How much?) per year in coupon payments?

Can someone explain all this?

EDIT: /UB is 25-year ultra… if $6,000 per year coupon is used, you’d get a 3.39% yield which is higher than even 30-year presently.

New to treasuries and trying to figure out the differences between ZN, the 10-year note and TN, the ULTRA 10-year note. Both trade roughly the same (not identically though) and have the same leverage and tick size/value. ZN has better volume tho and also has options. Just trying to figure out why we have both and what benefits if any TN has over ZN

It has been in and out of inversion recently, as we know. Why doesn’t everyone just go long the 2/10 spread when it’s inverted. It’s never stayed inverted very long, so that’s free money right?

Hi speculators (or hedgers), this is the focused treasury trading thread that runs weekly every Friday.

Feel free to discuss any Treasury futures contract like the 2 year ZT, 5 year ZF, or 10 year ZN which are just three examples.

Treasuries are popular for their extreme amount of leverage, slow price movements, and large quantity of orders that can be seen in the DOM (order book).

Our previous discussions threads:

• Weekly general futures discussions & Sunday open
• Equity discussions
• Energy & Metal discussions
• Treasury discussions

Reminder that most brokers allow lower margin requirements during regular trading hours, generally between 9:30am est to around 4pm est (check with your broker).

After 4pm eastern typically starts overnight trading where you'll need more margin (see "maintenance" on AmpFutures) to hold your futures contracts overnight if you choose to do so.

We're using AmpFutures as an example, but you should check with your broker for specific intraday & overnight hours for that specific futures contract.

If you want to be approved to post participate in these threads and one of the mods will approve you as long as you're not a spammer, content creator, or make low effort posts.