Get an introduction to what the Yield Curve of Interest Rate futures plots, how to set up trades based on your outlook of changing rates, and how to add a /GC position to enhance your trading strategy!
See more videos from the Closing the Gap: Futures Edition Series: http://ow.ly/Tv73h
Interest Rate Futures allow traders to make plays on varying treasury durations and their current and future yields/rate changes. The TUT Spread is an important gauge using the 10 Year Notes (/ZN) and the 2 Year Notes (/ZT). It is used as a potential indicator of how interest rates might change in the future and of current and future economic conditions. Subtracting the Ten Year Yield from the 2 Year Yield, historically, the difference right now is at the lower end of its range. In order to trade these types of extremes on the yield curve, hedge ratios must be used to create a neutral position (because of the varying maturities). This is calculated using the delta of a bond, which is also called the dollar-value of a basis point (DV01). Find out how to create these neutral positions in order to play the "flattening" or "steepening" of the yield curve, and discover how adding Gold Futures (/GC) to the position can enhance returns and provide protection if directionally wrong.
The gap between the self-directed and institutional trader in the world of Futures gets closer as Tom and Tony go head-to-head with one of the Futures market industry's best institutional traders. We bring professional strategies to individual investors.
You can watch a new Closing the Gap: Futures Edition episode live and check out all previous episodes everyday at http://ow.ly/EoyGW!
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