Easy ED trade

Discussion in 'Financial Futures' started by Bobbybax, Sep 10, 2021.

  1. Bobbybax


    Sell MAR22DEC23 @84

    Roll front contract every 6 months as it expires

    On a 40 lot, ur margin will be about $20k and u can make $80k over 2 years.

    Fed has to raise rates over 84bps for u to lose money (if u hold the trade).

    My view is Fed won't raise at all, and definitely won't raise more than 50 with a Dem in office.

    Welcome all criticisms.
    destriero and Bastion_01 like this.
  2. maxinger



    easy money?
    Last edited: Sep 10, 2021
  3. maxinger




    you are selling in the middle of the hilited rectangle.

    I don't know how long the spread will stay within the rectangle.
    It may be a few more months, a few more years, decades ...

    all the best mister.
    Last edited: Sep 10, 2021
  4. Bobbybax


    Trading LIBOR spreads technically holds no value. Many people made millions up until 2008 by fading tops and bottoms in double flies and condors. The reason I'm not using a butterfly position for this trade is that the potential return versus the decrease in required margin is not sufficient.

    I was hoping for a discussion regarding the fundamental aspects of the trade.
  5. is there a particular reason you like eurodollars than an outright bet on treasury futures?
  6. Bobbybax


    I only trade long duration bonds like ZN as a spread against Bunds and CGB's. 3 month forward rates are basically a political animal. I find 10 year rates encompass too many variables to reliably predict.
  7. CGBs = Carribean Government Bonds?
  8. Bobbybax


  9. destriero


    I like it. Also a long vol analog.
    Bobbybax likes this.
  10. Bobbybax


    Exactly. It can be used to hedge a dedicated long equity position.
    #10     Sep 10, 2021