Treasuries Spread Bets

Bonds
Treasuries spread bets, i.e. trades on bonds and short-term interest rates (STIRs), can be used to take a view on where a country’s interest rate is headed next, or to measure the market’s confidence in a government’s ability to service its own debts and accoridng to Tim Hughes, MD, IG:

Significant themes like the future of the euro and managing the US deficit are going to linger for some time
Financial 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 Bonds

Below, spread betting firms that offer markets on government bonds:

Financial Spreads ETX Capital Spreadex IG City Index
BOBL Future Financial Spreads BOBL Future ETX Capital BOBL Future Spreadex BOBL Future IG BOBL Future City Index BOBL Future
Bund Future Financial Spreads Bund Future ETX Capital Bund Future Spreadex Bund Future IG Bund Future City Index Bund Future
Gilt Future Financial Spreads Gilt Future ETX Capital Gilt Future Spreadex Gilt Future IG Gilt Future City Index Gilt Future
Schatz Future Financial Spreads Schatz Future ETX Capital Schatz Future Spreadex Schatz Future IG Schatz Future City Index Schatz Future
US T-Bond 10 Year Future Financial Spreads US T-Bond 10 Year Future ETX Capital US T-Bond 10 Year Future Spreadex US T-Bond 10 Year Future IG US T-Bond 10 Year Future City Index US T-Bond 10 Year Future
US T-Bond 30 Year Future Financial Spreads US T-Bond 30 Year Future ETX Capital US T-Bond 30 Year Future Spreadex US T-Bond 30 Year Future IG US T-Bond 30 Year Future City Index US T-Bond 30 Year Future
The above spread betting markets may also be available with other companies. Also see spread betting comparison notes.


Spread Bet on Interest Rates

Below, firms that offer markets on short-term interest rates (STIRs):

Financial Spreads ETX Capital Spreadex IG City Index
Euribor Future Financial Spreads Euribor Future ETX Capital Euribor Future Spreadex Euribor Future IG Euribor Future City Index Euribor Future
Eurodollar Future Financial Spreads Eurodollar Future ETX Capital Eurodollar Future Spreadex Eurodollar Future IG Eurodollar Future City Index Eurodollar Future
Euroswiss Future Financial Spreads Euroswiss Future ETX Capital Euroswiss Future Spreadex Euroswiss Future IG Euroswiss Future City Index Euroswiss Future
Short Sterling Future Financial Spreads Short Sterling Future ETX Capital Short Sterling Future Spreadex Short Sterling Future IG Short Sterling Future City Index Short Sterling Future
The above spread betting markets may also be available with other companies. Also see spread bet comparison notes.



Spread Bet on Italian Bonds

David 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 Rates

IG 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.



User Questions and Answers on Bonds and STIRs

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