New to Interest Rates Trading

jklondon

Active member
212 2
Looking to move into F.I Trading. area

can anyone recommend :

- good product intorductory guides ?
- trading mechanisms - was going to trade over Capital Spreads platform. ..

Thanks.JK
 

TWI

Senior member
2,535 254
Euribor or Bund is good place to start.
Introductory Guide: BE CAREFUL it's a big boys market
The sb spreads I have seen have been horrendous D4F currently quote 97.83/86 in Sep Euribor whereas on exchange it is 97.83.5/84 at Eur12.50/tick (0.005) that is a very wide spread if you wanna lift..
FI is a professional market if you want to trade it actively the only way is direct exchange access. Other than that I think you are OK if you are playing for developing trends. They certainly do trend now and again but you may want to wait for an indication that the next tightening cycle is on cards first.
 
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zeeuk

Member
88 0
JK - Twalker is bang on. Virtually impossible with SB. Direct the best; and Bunds are the most liquid 'electronic' market in the world. I am not a Eurex spokesman - just in case!

You can also download / get some relevant guides from Eurex website to start reading up on.
 

JTrader

Guest
5,741 506
Trading interest rates

Hi

I would like to know a bit about trading interest rates.

If anyone can provide some/any basic information about how interest rates are traded, I will be very grateful.

what are the methods/broker types that it's possible to trade interest rates with?

Are interest rates exchange based?

Is interest rates trading a regulated market?

How do the stakes work - in terms of position size descriptions?

How does the potential for profit and loss compare to forex trading?

How big a market is interest rates trading compared to forex?

Which are the main/most liquid interest rates to trade?

Does trading via just conventional TA work well?

Is a level 2 order book available?

Is interest rates trading a 24 hour market?

What do interest rates traders need to look out for that may affect the prices? - the same Economic news releases that affect forex prices?


Any feedback gratefully received

Many thanks
:D
jtrader.
 

BBB

Experienced member
1,071 3
Futures and/or options are probably the best ways to speculate on interest rates.

Look at Euribor on LIFFE.com
Bunds, Bobl, Schatz on EUREXchange.com
Bonds, Notes on CBOT.com
Eurodollar (THE DADDY) on CME.com
 

jklondon

Active member
212 2
thanks for the info - as you guys have pointed out this doesnt work with SB - (did some paper trading)!
 

Rhody Trader

Senior member
2,620 266
what are the methods/broker types that it's possible to trade interest rates with?

The futures market is the primary way for individual traders to operate in fixed income.

Are interest rates exchange based?

Yes, though not generally as rates per se, but rather at fixed income instruments such as Bonds, Bunds, Gilts, Eurodollars, etc.

Is interest rates trading a regulated market?

Yes, the futures markets are regulated.

How do the stakes work - in terms of position size descriptions?

Each futures market has it's own size definitions, which are pretty readibly available. There are also some mini sized contracts.

How does the potential for profit and loss compare to forex trading?
Depends on the method of trading you use.

How big a market is interest rates trading compared to forex?
Not even close. Forex is bigger than all the other markets combined.

Which are the main/most liquid interest rates to trade?
Eurodollars are the highest volume across the board. You can find liquid trade in instruments based in all the major currencies.

Does trading via just conventional TA work well?
It certainly can.

Is interest rates trading a 24 hour market?
Yes, but not with the same kind of activity you would see in forex.

What do interest rates traders need to look out for that may affect the prices? - the same Economic news releases that affect forex prices?
Most of the same indicators apply. Actually, the fixed income markets tend to be more sensitive to these releases than are forex or equity markets.
 

zftrader

Junior member
12 0
I would start out by trading the schatz and hedging you position with one or may two option against it. It doesn't move very much in comparison to the bubl and the bund making the options cheap. You will also have more time to learn about the markets before you go broke!(or a least it will keep you in the game until you learn how to make money)
 

TWI

Senior member
2,535 254
LOL Alexxxx
 
 
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