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Listen to “How to Trade the Bonds' Market” on Spreaker.

Hi, guys. Hi from Andrea Unger. Some bonds we will talk about today.

Let’s start from Europe with Bund Future, FGBL, or sometimes only GBL. Bund Future on Eurex Exchange is an interesting future. It moves not too fast, so it’s also good for people who don’t want to dedicate too much money to trading, but it’s not easy to develop on Bund. Mostly went up during the years. 2013 went a bit down, but you have a strong upside BIAS, which makes difficult to find some short edges. You might say, “Well, I don’t need it.” Yes, but we don’t know what happens tomorrow. And we are at levels which could not be imagined before. So actually, we could expect a drop. I’m not saying anything about the future, but we could have the necessity to trade a falling market, and we don’t have models; it’s difficult to find something that works. So, not easy.

If we go BOBL, it’s a strict relative to Bund—very similar. You do not consider it because you have enough with the bond. And you could also consider the future on Italian BTP or the OAT, they are all alternatives. But if you focus on this, you have more than enough.

In the States, we have the 30 years T-Bond, the 10-year notes, the 5-year—all these are very liquid markets. This is the most liquid when going up, let’s say; but still, this one which is the less liquid among the three, it has an enormous level of liquidity. So, they are very good for just volumes, but they’re difficult to trade. They are also pretty much expensive. One point is $1000 worth. They move enough. You might not feel comfortable with them as a first step.

And also, for this, believe me, breakout strategies are extremely difficult to find. Counter-trend strategies do work, but it’s still not very easy to find something to develop. So, I won’t say– You could consider all these if you want to diversify your portfolio—it’s fine, but if you want to start with something, you better focus on normal markets because these are markets which are not easy to develop on.

But we have many other markets to discuss, other videos will come, other videos already are there. Stay tuned.

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