Stocks & Commodities V. 33:04 (31, 33): Futures For You by Carley Garner
Product Description
Futures For You by Carley Garner
TREASURY BOND FUTURES: TRADE OF A LIFETIME?
There is a massive spread between the March T-bond futures contract and the June contract. What could cause this?
As traders shifted focus from the March 2015 30-year bond futures contract to the June 2015 contract, calls and emails began flooding in to me. In general, futures traders are aware of, and accept, a certain amount of contango, or backwardation representing the difference between the current contract month and those contracts with more distant expirations. However, the massive spread between the June and March 30-year bond futures is breathtaking—it left many wondering if it was a rare market inefficiency, or even the trade of a lifetime. But it isn’t, and there’s a good explanation.
TREASURY BOND FUTURES: TRADE OF A LIFETIME?
There is a massive spread between the March T-bond futures contract and the June contract. What could cause this?
As traders shifted focus from the March 2015 30-year bond futures contract to the June 2015 contract, calls and emails began flooding in to me. In general, futures traders are aware of, and accept, a certain amount of contango, or backwardation representing the difference between the current contract month and those contracts with more distant expirations. However, the massive spread between the June and March 30-year bond futures is breathtaking—it left many wondering if it was a rare market inefficiency, or even the trade of a lifetime. But it isn’t, and there’s a good explanation.
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