Can Interest Rate Be Traded Or Invested?
How can we participate in the rise and fall of interest rate? Firstly, we need to understand the difference between interest rate and yield.
Interest rates are a benchmark for borrowers whereas yield is for investors or lenders.
• Interest rates are the fees charged, as a percentage from a lender for a loan.
• Yield is the percentage of earnings a person receives for lending money.
Both move in tandem together, meaning if yield moves higher, interest rates will follow.
Discussion:
• Direction of the Yield in the short-term and
• Direction of the Yield in the long-term
Divergence in a bull market means the bull is losing its momentum, keep a look-out for trigger points that may cause further stress to the market.
Micro 10-Year Yield Futures
1/10 of 1bp = US$1 or
0.001% = US$1
3.000% to 3.050% = US$50
3.000% to 4.000% = US$1,000
Note:
Micro Treasury futures are not micro-sized U.S. Treasury securities. They convey no rights of ownership, nor or they pay or accrue interest.
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
Interest rates are a benchmark for borrowers whereas yield is for investors or lenders.
• Interest rates are the fees charged, as a percentage from a lender for a loan.
• Yield is the percentage of earnings a person receives for lending money.
Both move in tandem together, meaning if yield moves higher, interest rates will follow.
Discussion:
• Direction of the Yield in the short-term and
• Direction of the Yield in the long-term
Divergence in a bull market means the bull is losing its momentum, keep a look-out for trigger points that may cause further stress to the market.
Micro 10-Year Yield Futures
1/10 of 1bp = US$1 or
0.001% = US$1
3.000% to 3.050% = US$50
3.000% to 4.000% = US$1,000
Note:
Micro Treasury futures are not micro-sized U.S. Treasury securities. They convey no rights of ownership, nor or they pay or accrue interest.
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
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