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brownsfan019

Bond Futures, Not Sexy but Worth a Look!

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Ok. What about electing MTM on the equities? Is it still better to stick with futures, with the lower commission of equities taken into account?

 

If you are profitable, futures taxation will beat all other factors IMO. If you are not profitable or minimally profitable, could be a wash either way.

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Treasury sells 30-year bonds at 4.72%

 

MarketWatch.com Story

 

This caused a huge rally in the ZB today, and a rally happened at the same time in the indexes.

 

The ZB rallie looked very easy to trade if you were prepared for it. But Forex Factory calendar made no mention of the treasury sale. Where do I get the schedule for these Treasury sales?

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Barron's includes the Treasury announcements and auctions HERE.

 

 

Excellent. Thanks. I used to use the Econoday calendar, but Forex Factory has a very nice setup so I've been using it instead. I'm suprised Forex Factoy doesn't have that info, because the USD also dropped alot at that time.

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Barron's includes the Treasury announcements and auctions HERE.

 

That's the one I use and you can clearly see at 1pm today there was the 30 yr auction.

 

Buyer beware though Abe - watch how the ZB operates on releases, it's not always one quick move to the upside.

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The CME is going to increase the 30-Year back to 1/32 (31.25/tick) at the end of August. This separates the contract from the 10-year as both shared the same ½ of 1/32 increment. The Press Release can be found HERE.

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ZN has a larger tick size of 15.625 compared to 7.8125 for ZF. Daily Volume for the ZN is higher since it follows the cash Benchmark but the ZF is never thin. Larger range is usually seen for the ZN but the swing patterns will be virtually identical imo. For me, a trade consideration is based on which one sets up better at that point in time. Because of the smaller tick size, ZF may offer you a little more flexibility in trade management.

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Could someone tell me which of the following contracts is more advantageous to trade.

ZF or ZN?

 

Thank you

 

Gabe

 

While there are 3 main bond futures, they each have their own little tendencies. I'll do my best to explain here but nothing is a substitute for chart time. That is one thing I love about OEC - I can just pull up any chart I might be interested in without any costs or calling up a data vendor and paying more fees.

 

Here's how I view the bond futures:

 

ZB
- king of tick value now that it's $31.25 PER TICK=1 PT. Yep, that's not a typo. It now moves in full point increments which is a recent change. It usually is the 'least' liquid of the 3 but that's all relative. I traded the ZB for a while when the tick value was $15.625/tick. It has good moves overall.

 

ZN
- most liquid and has good moves as well. Tick value is $15.625 here so it's lower than the ZB and provides nice moves.

 

ZF
- is more 'spikey' IMO. If you put these charts side-by-side, I think you'll see the ZF spike more when the other 2 aren't doing as much. If you want more volatile and quicker moves, then the ZF is a good choice. I would strongly recommend having resting profit target orders out there as it's very common to see it spike and then quickly retrace. If you hold out for a big move, it may not happen.

With all that said, I've been focusing my early morning trades on oil and bypassing the bonds for now. I can't argue with the results I'm seeing on oil, so I've put my focus there instead of bonds.

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I am trying to see if bonds are 'not sexy - but worth a look'.

 

Anyone got any 1 minute ZN (10 year) data that they would be willing to donate.

 

If anyone is interested I plan to turn it into Market Profile graphs intraday.

 

Thanks

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I guess we need to know what exactly bond futures are,

A bond future is a contractual obligation for the contract holder to purchase or sell a bond on a specified date at a predetermined price. A bond future can be bought in a futures exchange market and the prices and dates are determined at the time the future is purchased.

 

Bond contracts are standardized, and are overseen by a regulatory agency that ensures a certain level of equality and consistency. However, this form of derivative can be risky because it involves trading at a future date with only current information. The risk is potentially unlimited, for either the buyer or seller of the bond because the price of the underlying bond may change drastically between the exercise date and the initial agreement.

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