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Of Spreads, Corn, Gappers and Reopens
Here is a good example of how the market behaves when price reached a trading limit. Here we are looking at Corn after a USDA report. Old crop July went limit down right after the data and pretty much stayed there. New crop December also sold off, but stayed above limit. Now, the exchange spread [...]
Continue reading...Calculating the Hedge Ratio for Aussie Bonds
11. February 2013
One thing you need to consider when trading spreads is what we call the hedge ratio. This article and video looks at how to calculate the ratio using DV01s for fixed interest traders.
Continue reading...Rolling, Rolling, Rolling. Keep Them Bonds Moving.
10. December 2012
You’ve heard of Shark Week. Well this is Rolls Week. For the SFE bonds, this is when all the activity moves from the near expiry to the next. In this case, it is moving from Dec into March. On CQG, you should be able to find the calendar spread for the Dec-Mar 3yrs and the [...]
Continue reading...Yes, We Speak in Code
28. November 2012
When new to futures or new to specific futures markets, it can be tricky finding the right codes. This guide explains a few things.
Continue reading...What Is The Market Trying To Do?
27. November 2012
Here is an email from and response to one of our trainee traders: Hi Mr Bower, I am trying to experiment with how to better tackle trending & choppy markets, and some fading strategies. I’m also trying to trade the more volatile ES. Trying to step out of my comfort zone. Apparently, the usual scalping [...]
Continue reading...Size Isn’t Everything
18. September 2012
I can’t help it. I keep seeing similarities between riding a motor bike and trading. They are everywhere.
Continue reading...DV01 Pricing Tools
15. August 2012
Here are a couple of tools we use in the analysis of note and bond markets.
Continue reading...When is a Spread not a Spread
5. August 2012
Spread trading is more an art than a science, but there are a few common traps we often see new traders fall into. Mistake#1 seems to be a particularly popular one...
Continue reading...Bond Futures Reaction to RBA Rate Decision – July 2012
3. July 2012
Well this is not the most exciting of reactions, but it’s a good video to watch if you are new to trading SFE bonds and new to watching depth. The video shows how the volume thins out before announcements and how volume comes back after the release.
Continue reading...The Long and The Short newsletter
That Social Media Stuff…
29. March 2013
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