Significant themes like the future of the euro and managing the US deficit are going to linger for some timeFinancial spread betting offers clients a number of benefits when trading Treasuries, including a transparent pricing structure and the ability to make profits free of tax*.
Also, because spread betting is a margin-traded product, only a percentage of the total exposure is required initially as a deposit.
Of course, it is a high risk form of trading. Please be careful.
Missing Out By Not Spread Betting on Bonds and Interest Rates?If you’re worried that you’re missing out because you’re not spread betting on interest treasuries, don’t be too concerned.
A lot of firms offer 5-10 treasuries markets but they see very few trades on them (less than 0.5% of all spread bets).
That’s not a surprise when most spread bettors like volatile markets and neither bonds nor STIRs are that volatile on a day-to-day basis.
Also, these are longer-term markets and therefore not that suited to financial spread betting or CFD trading.
If you throw in the added complication that interest rate markets are essentially reversed, i.e. these markets are priced at “100% – the predicted interest rate” and that adds another level of confusion and another reason not to trade.
You probably aren’t missing anything.
Spread Bet on BondsBelow, spread betting firms that offer markets on government bonds:
|US T-Bond 10 Year Future|
|US T-Bond 30 Year Future|
Spread Bet on Interest RatesBelow, firms that offer markets on short-term interest rates (STIRs):
|Short Sterling Future|
Spread Bet on Italian BondsDavid Jones, IG Index‘s Chief Market Strategist, has said that:
Historically, yields across all the eurozone sovereign debt instruments were very similar, with the German issues being seen as the benchmark.
However, there has been a decoupling of this relationship, so the heavily traded BOBL and BUND are no longer a reasonable proxy for other eurozone government bonds.
This also means there has been a huge increase in the volumes traded in the underlying market for instruments like BTPs (aka Buoni del Tesoro Poliennali).
Looking for More Bonds and RatesIG Index is offering Long-Term Euro-BTP (BTP) futures contracts as determined by Eurex.
They also offer 2-year and 5-year Treasury Notes, as issued by the United States, as well as UK Short-term Gilts.
Actually on the IG platform you’ll also find, Euribor, Euroswiss, Sterling Deposit, German Schatz as well as Canadian and Japanese bonds.
Spread betting carries a high level of risk. You can lose more than your initial investment or stake. Spread betting may not be suitable for all investors. Only trade with money that you can afford to lose. Make sure you fully understand the risk involved. If necessary, seek independent financial advice.