U.S. Treasury yields are heating up again, how to trade
We often see news like this in Futu Information, "The U.S. Treasury Yield $US 10-Year Treasury Yield (US10Y.BD)$ has recently risen above 1.5%, will it again arouse a wave of selling in the bond market", the truth is unknown. The newcomers of MooMoo will find it strange, why does the rise and fall cause a sell-off? Take a look at the current 10-year U.S. bond futures on the CME Exchange that Futu can trade. There are two varieties, namely:
Let’s look at the $10-Year T-Note Futures(DEC4) (ZNmain.US)$ . The transaction is the direct price of Treasury bonds. The multiplier of a futures contract is 1000. Based on the quoted price of 130 US dollars, trading a futures contract is equivalent to nominal Treasury bonds worth 130,000 yuan. The trading margin for each ZN futures is about US$2,000. If you go long, buying from 130 to 132 will result in a profit of US$2,000, which is equivalent to doubling the margin, and vice versa. The contract months of ZN futures are usually March, June, September, and December, and the main contract currently traded is ZN2112.
Look at the main $10-Year Yield Futures(NOV4) (10Ymain.US)$ , and the transaction is the price of the bond yield, which is what the news mentioned above, a futures contract multiplier is also 1000, According to the quotation of 1.5, the value of each futures contract is only 1,500 US dollars, so the margin is as low as 250 US dollars. If you go long, buying from 1.5 to 1.75 will result in a profit of $250, which is equivalent to doubling the margin, and vice versa. The contract month of 10Y futures is usually a consecutive month starting from the current month, and the main contract currently traded is 10Y2110.
The price movements of ZN and 10Y are completely opposite! If the above news says that the U.S. Treasury yield has risen above 1.5% recently, the corresponding "10Y" price is rising, while the "ZN" price is falling, so please don't make the opposite!
Of course, these two futures varieties also have something in common, that is, the daily trading time is very long and long, which makes people unable to stop~
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