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Let me be more specific then. Everyone hears that the ten year note has now
replaced the 30 year bond future.
Look...there are reasons some traders/investors/hedgers find the ten year the
place to be. They may have international exposures that dovetail nicely term
against term--meaning ten year eurobonds against US ten year notes. Or they
might be hedging a mortgage portfolio or credit card portfolio or asset backed
lending--all shorter durations than 30 years. If that's their situation, ten
year notes are great for them.
But bonds are deeper and more liquid at most any time during the day in the
pit. And the average true range for bonds remain larger. And if you trade both
side by side, even though ten years trade in half 32nds [not true 64ths],
there is less slippage in bonds if you have a decent broker.
The headlines that read "Bonds are dead!" were premature. Remember: No one
even knows the buy back plans yet. And as Greenspan said, there are plenty of
quality AAA 30 year bonds out there that can be used as a proxy pricing
mechanism.
I don't see bonds being replaced by notes. I do see notes becoming a more
viable trading vehicle. So now you have two longer duration vehicles that you
can learn to use in your trading.
Best,
Tim Morge
D Bisnath wrote:
> My apologies for being ambiguous; I realized the original question may be
> interpreted
> in two ways:
>
> - the T-Bond trading is very inactive, low volume, or is going down.
>
> OR,
>
> - the T_bond is being pushed aside as the premier Bond trading instrument;
> one reads
> and hears of the Ten-Year as more representative etc etc.
>
> I am sure most RT'ers are interested in both of the above.
> Thanks
>
> ----- Original Message -----
> From: BruceB <bruceb@xxxxxxxxxxxxx>
> To: <realtraders@xxxxxxxxxxxxxxx>
> Sent: Wednesday, March 01, 2000 10:17 PM
> Subject: [RT] Re: 30-year Bond dead, RIP
>
> > Might appear dead if you're still watching the March contract...
> >
> > Bruce
> >
> > > D Bisnath wrote:
> > >
> > > > Is it?
> > >
> > >
> >
> >
> >
> >
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