ACE 30 Year Bond - May 06, 2019

Below is an illustration trading futures options on 30 year bond (ZB).  Our post shows bullish and bearish positions using a combination of call and put options.


Trade Options on Futures

30 Year Bond (ZB) * Directional & Neutral Positions

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Volatility

Options fall into the category of being slightly undervalued in non-volatile markets in the weekly options report. 
Ask about the Weekly Option's Report for more information or watch our video.

zb vol


Notes:

Contract Size - Points ($1,000) and 1/32 of a point. For example, 134-16 represents 134 16/32.

Tick Size:  1/64 of a point ($15.625/contract), rounded up to the nearest cent/contract.

Trading Hours: CME Globex: Sunday - Friday 5:00 p.m. - 4:00 p.m. Eastern Time (CST).

* Tip: Par is on the basis of 100 points. For cabinet transactions only, minimum tick sizes range from $1.00 to $15.00, in $1.00 increments per option contract..

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30 Year Bonds

Below are weekly & daily charts for reference.

zb weekly 05 06

zb daily 05 06

* Tip: To view a larger chart image, simply right click on the image with your mouse. Next, select view image. Be sure to click the back arrow on your browser to go back to the original page.

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Strategies

Below is the starting position for an strangle swaps. It allows for time to adjust the spread structure if necessary as price moves within a reasonable range of daily volatility. For example, monitoring the position at T+0, if prices approached 148, the strategy could be re-adjusted with a call spread to neutralize delta.

The % yield shown in the diagrams below represent an estimated return on margin from projected dates shown below. The structure has positive time decay which is an advantage over holding outright options.

zb sswap