Interest Rate Options
What is the simplest way to trade interest rate options (short-term rates) using a personal trading account? Is this even possible?
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Options on interest rate or treasury ETFs. I didn't actually look into it and could be wrong, but that would be the first place I looked.
What are some of the popular treasury ETFs? As far as I know treasury ETFs tend to encompass the entire yield curve... an ETF focused on short-term rates would be most appropriate for my purposes...
http://tinyurl.com/dkuja3
There's an ETF for anything....
I like to trade the TBT and TLT's on my PA
Any broker that has a connection with CBOE should give you access to IR Options. For example, Interactive Brokers is decent. Maybe not best for starting off. Just look for an options/futures broker.
Here is the CBOE explanation of products:
http://www.cboe.com/Products/InterestRateOptionsSpecs.aspx
Thanks PnL... researching TBT/TLT led me to SHY which covers the 1-3 year yields.
Revsly... I'll look into it. I'm using questrade so I'll have to see what they offer
I doubt they'd have futures/options on things that aren't stocks or ETFs. If you want to trade the options on the futures then absolutely open another account with a futures broker that offers those products. Otherwise, you could play ETFs if you want to be more casual about it, absolutely nothing wrong with that.
Always an option if you have a strong feeling about future yields.
before I get pilloried by college sophomores who think they know something.
Inverse bond funds have performed miserably over the past decade, they charge exorbitant management fees, and the minimum investment is usually $25,000 or more. In other words, a horrible investment of late.
I was just throwing it out there as an option.
... there are many highly liquid options on rates. You just need to get a broker who is set up to let you trade them...CBOT has options on 2 year, 5 year, 10 year, and 30 year bond futures as well as options on Fed Funds futures. CME has options on Eurodollar futures which are basically three month libor contracts and are very liquid and easy to trade.
Voice Brokered Interest Rate Options and Futures (Originally Posted: 09/24/2016)
I support a rates option trader who still does voice execution. While he does do alot of more trading electronically, he does a decent amount of volume via brokers. Currently, the only way to get the brokered trades into our risk is by having the broker send an excel recap whereby we put the information from the excel sheet into a macro and import it into our risk system. This has to be done many times throughout the day as the recaps come in. So my question is this: Does anyone know of a process of getting brokered trades into risk system without a macro? Are there any tools on bbg to leverage some type of stp processing.
For voice trades the workflow won't lend itself to off-the-shelf stp easily. That said it really seems to be just a matter of some relatively simple code.
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