Crude oil (CL) is one of the more active commodities to trade. It has tremendous volatility and excellent liquidity. Oil is affected by global economic and political conditions, almost to the same extent as US Treasuries. The price of crude oil affects the price of many other assets, including stocks, bonds, currencies and even other […]
Author Archives: Ernie Varitimos
07
May
May
The BoB spread is a type of yield curve spread, it depicts a spread between the very longest maturity treasuries, the 30-year Bond and the 30-year Ultra Bond. So, what’s the difference, and why is this such a good trading vehicle? Here’s the part of the yield curve that the BoB spread represents, indicated by […]
28
Apr
Apr
Spread or pairs trading is a very effective way to hedge your risk exposure to the movements of the broader market. With pairs trades you can make profits through simple and relatively low-risk positions. The trade is market-neutral, which means the direction of the overall market does not affect profit or loss…it’s the change in […]
25
Apr
Apr
There are many variations of the yield curve to trade, and it can be confusing which is the right one for your needs. So you may be wondering, which should I trade? The answer is relatively simple, if you understand your personal capacity and tolerance for risk, and whether you are a long-term or short-term trader. […]
24
Apr
Apr
In a previous post on Yield Curve Trading I list all the popular yield curve spreads that institutional and professional traders watch. The TUT spread is the 2-year over the 10-year Treasury futures spread. It’s a pairs trade that’s the difference between the notional values of the two contracts (cash value of the contracts). This spread […]
23
Apr
Apr
When we speak of hedging, what we’re really talking about is a pairs trade, where we go long one asset and short another. We hedge to take advantage of several key aspects of Treasury futures. The most important is the edge we get by eliminating the directional aspect of price (minimizes risk) and focusing instead […]
20
Apr
Apr
Yield Curve trading using futures has been the bread and butter of large institutions and professional traders for decades. This type of spread trading offers excellent returns and hedging opportunities in one of the most liquid markets in the world, US Treasuries. In our opinion, broader adoption to this type of trading into the retail […]
19
Dec
Dec
Statistical Arbitrage is a pairs or spread trading strategy, predominately used by hedge funds, investment banks, and professional traders. The strategy involves tracking the difference in notional value between two highly correlated instruments, like Silver and Gold futures, or the NoB spread, which is a trade between the 10 year and 30 year treasury futures […]
12
Dec
Dec
When the stock market is closed, and you have a position in a stock, your hands are tied. If an opportunity arises outside of market hours, you can't take advantage of it, and worse, if you have to exit a position, you can't until the market opens the next day. But in the world of [...]
11
Dec
Dec
Have you ever been locked out of trading because of a trading violation? Maybe your broker claimed you were a patterned day trader? Or have you missed an opportunity due to short selling restrictions? Perhaps shares weren't available to short? This happens a lot with small priced stocks, but can even happen with big stocks [...]