T-Notes

[refxr89]

I have some very general questions about t-notes.
Can they be traded like stocks, i.e. any length of time (minutes,days,weeks+),
or are you required to hold them for a specific period of time?
And do they "trade" lke stocks, as in buy low, sell high?

refx

[forexmaveric]

Shorting & trading physical t-notes outright is pretty hard. You can be long or short t-notes but I believe to trade the actual note requires to buy or sell 100,000 dollars worth of notes at a time and the margin requirement is subject to the t-50 regulation( need to put up 50% margin).

Most banks, hedgers, and speculators trade the t-note futures at the Chicago Board of Trade. The margin is more favorable (1.5%). HOWEVER, this makes it more volatile...and shorting is as easy as going long. Plus, you can trade options on t-note futures at the CBOT.

Here's some lnks for info:

www.cbot.com

www.investinginbonds.com

www.thebondmarket.com

[refxr89]

Originally Posted by forexmaveric

...
Here's some lnks for info:

www.cbot.com

www.investinginbonds.com

www.thebondmarket.com

Thanks for the info. I need a "Bonds and Notes for dummies". I have no clue how bonds and notes correlate to other markets.

[wozdan]

Hello,

refxr89, I don't know if you are just interested in bonds (not forex) but I can give you some info on how I track bonds to have a better understanding of what's going on in the fx market.

The problem with bonds for retail guys like us is access to quotes and charts. I found that it's best to look at the most liquid parts of the market - the benchmarks, however I look only at futures on the 10Y T-Note and the 10 year Bunds because they are very liquid and often give clues to what is going on on eur/usd.

I have an account with a spread betting company in the UK and they have live quotes and indicative charts for many fixed income instruments. The only problem (but only for those who trade them, not for me, I jus look at them) is that they quote the price in a decimalised format i.e the sep-05 10y t-note is at the time of wrighting shown as 11132. For me it's ok because I am only interested in the change in price and the charts are not bad.

As for analysys, well, it's very hard. There are no rules here as to gauging the impact of price action of bonds on fx. I have some theories of course but it's a long story...

Please specify what you need and maybe I can help.

Regards,

Wozdan

[refxr89]

Originally Posted by wozdan

Hello,
...
As for analysys, well, it's very hard. There are no rules here as to gauging the impact of price action of bonds on fx. I have some theories of course but it's a long story...

Please specify what you need and maybe I can help.

Regards,

Wozdan

Thanks Wozdan.
I really don't know. Right now it's more intriguing than any thing else. I here about notes and bonds and yields, but have little idea about how they may affect (or not affect) the economy or market sentiment. Is there a general rule of thumb regarding the their prices as they correlate to the economy (and possibly other markets)?
refxr

[wozdan]

This is a very complex subject and using rule of thumbs in an analysis of the bond/forex market and the economy is dangerous. Please do not think I am rude, but If I were to tell you the whole theory on interest rates and the economy I would have to write a hundred pages. I suggest you first take a look at any economics book, at the chapter on interest rates. Once you have that basic knowledge I can explain to you how to analyse diffrent market developments in context of the forex market.

regards

wozdan