Finadium’s Post

US quarter-end came with repo market stress, which saw a double-digit rates spike and an uptick in standing repo facility use. That’s focused attention on funding pressures as the Fed’s quantitative tightening program progresses against the backdrop of a policy shift from abundant to ample reserves. How concerned should market participants be, and how will the repo market know when we reach an ample reserves environment? We review recent comments from Robert Perli, manager of the System Open Market Account (SOMA) at the New York Fed, and hear from Stephen Malekian, securities finance expert, about why some market participants believe the repo market is headed for year-end volatility. Anna Reitman More on #finadium: https://lnkd.in/evKQHuwn

I USE THE COT(COMMITMENTS OF TRADERS) REPORT TO TRADE BECAUSE IT TELLS ME WHAT HAPPENS IN THE FUTURE. WHY DON'T YOU USE IT? Because it doesn't work. What you have to understand (much like anything in life) is what you are actually looking at. Futures contracts do not tell you what is in future. All they tell you is what the market has decided to position itself in three months. Remember Futures can reprice to Spot just as much as Spot can lean towards Futures. Here are my top 7 considerations on gaining value in Futures: 1. COT is lagging and the last time I looked it got released Thursday. Whilst it takes no genius to work out, lagging means just that. 2. As mentioned when the contract expires, PA can move in both ways. Triple Witching week is a nightmare and a lot of players think they can make money out of that week - to their cost. 3. Futures pricing is flipped on a few currency pairs like CADUSD and JPYUSD but the charts are the same difference - just flipped. 4. Futures can be a lot quicker in their moves on data - but generally they track similar moves on spot. 5. They are thinner so factor this into your stops. Exchanges' bids and offers on ladders may display the intention, but Volume footprints tell you what actually got done. I used to use both when I traded Futures. Market Delta in Chicago (now not with us) was a leading shop offering up data. 6. I did a FREE Masterclass on how I became a Futures trader - if you would like a copy LIKE and share this post, along with a DM to me. 7. Futures is a great training ground to be a PM in a hedge fund. You get access to rates, FX, Bonds, Commodities and Equities. For background purposes I started trading Futures over a decade ago.

Quote size and liquidity dry up leading into the Fed's decision, and it takes several minutes to recover. Prior to the #FOMC announcement, both the quote size and liquidity showed a significant reduction, reflecting the market's cautious stance. QB's volume and variance forecasts take these events into account for trading. Traders need to be mindful of the impact of such events on trading. Download now: https://lnkd.in/gUeJG2qv

By incorporating various #diversification strategies into your futures portfolio, you can enhance the resilience of your trades, better manage risk, and focus on your performance over time. Here are a few common ways to achieve balance through diversifying: 1. Explore Different Asset Classes Diversify across various asset classes, such as commodities, currencies, and equity indices. Each class responds differently to market conditions, helping to mitigate risk and enhance overall portfolio stability. 2. Mix Long-Term and Short-Term Contracts Incorporate a blend of long-term and short-term futures contracts in your portfolio. Long-term contracts may provide stability, while short-term contracts offer opportunities for more active trading and potential quick gains. 3. Balance Risk and Return Evaluate the risk and return characteristics of each futures contract in your portfolio. Strive for a balance that aligns with your risk tolerance and financial goals. Some contracts may offer higher returns but come with increased volatility, while others provide stability but lower returns. Looking for more guidance? Our team of 5-star brokers are always on hand to help you with everything you need, when you need it. ☎️ Contact us at: https://lnkd.in/gR2B7VR5 #Diversification #FuturesPortfolio #TradingStrategies #FuturesTrading Disclaimer: Derivatives trading involves a substantial risk of loss and is not suitable for all investors.

🚀 Dive into the world of Pair Trading Micro Yield Futures with our new article! Read more: https://lnkd.in/di5fzzSE #YieldFutures #TradingStrategies

Almost US$2 Trillion from the Fed’s overnight reverse repo facility have re-entered the system since April 2023 and therefore too much liquidity was chasing too little collateral. This kept rates in check. But soon – in a couple of weeks – this repo facility will hit zero. Consequently, too much collateral will start chasing too little liquidity. That will very likely tighten financial conditions significantly and put upward pressure on US rates again.

Bond Traders Amassing Historic Level of Risk on Rate-Cut Bets Open interest in futures, or the amount of risks taken by traders who can be long or short positions, peaked at a record of almost 23 million 10-year note futures equivalent, last week, CME Group Inc. data and Bloomberg analysis shows. That’s roughly $1.5 billion of risk per one basis point move in the underlying cash notes. #leverage #treasury #bet #trading #timewilltell #economy source : bloomberg

🚀 Dive into the world of Pair Trading Micro Yield Futures with our new article! Read more: https://lnkd.in/di5fzzSE #YieldFutures #TradingStrategies

A few weeks ago, we highlighted the pain trade for bond yields to drift higher. With the 10-Year yield now back above 4.0%, it’s interesting to see how the trading community is positioned. Something that caught my attention is Goldman Sachs’ projected flow for CTAs in US Bonds over the next month—there’s a significant skew in potential selling (see chart)… #markets #investing #trading #bonds #CTAs #fixedincome https://lnkd.in/eme9Dc2V

Forex vs Futures Trading: What’s the Difference? Forex and futures on centralized exchanges are fundamentally different instruments. Nevertheless, they have similar characteristics. For instance, both markets involve margin transactions. Forex trading, as well as on the centralized exchange, has two options. These are spot and futures contracts. Traders use the Forex futures market mainly to implement medium-term strategies. Intraday trading is more common on the spot. Futures trading on a centralized exchange is considered more secure. The reason is minimal risks of the counterparty. But it requires a larger deposit.  The overview given here will allow us to understand the peculiarities of these markets. It helps to choose the most proper trading option. #forex #trading #investing #beatmarket #stockmarket Read full article at: https://lnkd.in/gW6_ednx