Futures For You by Carley Garner
With Treasury futures at or near an all-time high, I would like to begin trading options on bond and note futures but I am having difficulty calculating profit, loss, and risk.
Figuring in Treasury options often causes confusion for two primary reasons. First, both options and futures in Treasuries are traded in fractions. Second, unlike other commodities and financial futures, bond and note options differ in the manner in which they are quoted from their futures contract counterparts. Before you can understand how to calculate Treasury options, you must be comfortable with calculating in the corresponding futures contracts. Keep in mind that if you are capable of computing in Treasury bonds, you will be proficient in T-notes.