If you thought Friday was volatile, today trumped the lot, with massive swings in the Bond Futures and STIRs. Short Sterling having the biggest move at one point being down 25 ticks represent a full 1/2 percentage rate hike.
Spreads today however were pretty stable which made trading a matter of nicking 1/2 ticks which there were plenty of opportunities to do so as the general volatile movements of Euribor and Short Sterling presented many opportunities.
Bunds traded below 140 for the first time in over a year as speculators bet on removal of Stimulus sooner rather then later, we are now trading 140.50 as we have bounced some what but still 100 ticks down on the day.
Personally I think this is way over done, such movement so quickly is what markets tend to do, so I think we are going to come back in Bonds at some point. Timing is the hardest part, so I was looking into buying 141.50 or 142 September Calls in the Bund, with the risk defined from the start.
As far as my trading was concerned today, it ended up being one of the busiest days I've had. Pretty much no time to take a breather. Euribors had the bulk of the action in the morning, but then Short Sterling had some mega moves in the afternoon as we had two 10 tick spikes lower on very thin trade. This provided opportunities to get out some of my longs that I had been accumulating.
Below is the composition of the trades done today:
Spreads today however were pretty stable which made trading a matter of nicking 1/2 ticks which there were plenty of opportunities to do so as the general volatile movements of Euribor and Short Sterling presented many opportunities.
Bunds traded below 140 for the first time in over a year as speculators bet on removal of Stimulus sooner rather then later, we are now trading 140.50 as we have bounced some what but still 100 ticks down on the day.
Personally I think this is way over done, such movement so quickly is what markets tend to do, so I think we are going to come back in Bonds at some point. Timing is the hardest part, so I was looking into buying 141.50 or 142 September Calls in the Bund, with the risk defined from the start.
As far as my trading was concerned today, it ended up being one of the busiest days I've had. Pretty much no time to take a breather. Euribors had the bulk of the action in the morning, but then Short Sterling had some mega moves in the afternoon as we had two 10 tick spikes lower on very thin trade. This provided opportunities to get out some of my longs that I had been accumulating.
Below is the composition of the trades done today:
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