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Strategies & Market Trends : Bonds, Currencies, Commodities and Index Futures -- Ignore unavailable to you. Want to Upgrade?

To: OX who wrote (2335)	2/11/2002 2:09:08 PM
From: Louis V. Lambrecht	Read Replies (1) \| Respond to of 12411

Hi! OX! Futures T-Bonds are just as any future contract: current T bond is priced 103'16 (notice the ' quote <g>) while the TVX (interest index) is 54.5, this is yielding 5.45%. For every 1/32th on the T-Bond futures price, you move $31.25. Buy and sell as on any futures. What's your problem?

To: OX who wrote (2335)	2/11/2002 2:29:26 PM
From: GROUND ZERO™	Read Replies (2) \| Respond to of 12411

Sure, simple enough...<g> first of all, we need to understand the bond market trades in an inverted relationship with interest rates, this means bonds rally as rates decline... therefore, as a byproduct of this inverted relationship, the bond futures are at a discount to the cash market, unlike the SP's that are at a premium to the cash market... now, with this understand in mind, even if there were no expectation of rate changes and the cash bond market remained unchanged for months, the bond futures will continue to inch its way higher until it come up to the cash market... therein is the accrued interest in that market... GZ