Hubert Senters here.
Let’s take a look at the 10-year Treasury Notes.This is a futures contract. If that confuses you don’t let it scare you. They’re just futures.
The way you look at this is you really just need to know one basic fundamental and then you can kind of start trading these things.
Now, the reason I like futures is because they’re leveraged. You can trade it with smaller amount of money. You control a large amount of money so you have leverage.
Now, heads up, leverage cuts both ways. Both on the winning side and the losing side. But let’s go through some basics here.
Number one this the 10-year Treasury Note. I’m going to change the chart here a little bit on the timeframe. I’m going to make it like weekly and then I’m going to change it to monthly so.
As you can these things are quite the trending machine for the most part. As you can see here these things basically go up a lot overtime.
Now, the reason that’s happening is because we’re at historic interest rate low so think about when you go a platform alone or a mortgage the rate flcutuates up and down a little bit. That’s what these things are trading.
So it’s an inverse relationship to the percentage that you can go get alone at it’s called the yield. All you have to do is think about it and reverse.
If interest rates go down on like this then this product shouldgo up like that so interest rates are at historic lows. They’re not going to stay there forever.
They can’t keep them at zero for very long. What’s going to happen. This is a monthly chart. And I’m going to zoom in here on the weekly chart and you can see the weekly chart is starting to flop over.
The last time we had a buy signal they went from $120 all the way up to $138. That didn’t sound like a big move but these things are worth a lot of money.
So the multiplier will add up very quick. And we’ve already been actively shorting these things from several weeks when it breaks here it will probably drop like a stone down to $126 and then down to $118.
So now let’s look at the daily chart so the daily chart right here this thing is already down $17.5 that’s worth almost a thousand dollars.
Now, when I say it’s almost a thousand dollars that’s worth a thousand dollars per day basically on the 10-year note right now.
So a lot of you are going to ask me what are the margins? How do you setup an account and stuff like that? Let’s grab some data for you.
Now, the exchange set to minimums but your broker can charge higher than the minimums so you’re going to have to check with your broker.
So the 10-year note the symbol is going to be ZN, Zebra, Nancy. And as you can see here on the website which these guys own this contract.
And you can see that the maintenance is set to $1,250 so that’s just the set. You just got to have that amount of money in your account before you can place one trade for one contract to potentially make a thousand dollars a day.
Now, heads up, they’re leverage so you’re going to with that $1,250 you’re going to be basically managing on the 10-year note. It’s a hundred thousand dollars so.
For a $1,250 downpayment you can manage a hundred thousand dollars in the 10-year Treasury Note. Now, in some cases it can be slightly better or slightly worst than that.
I know on Trade Station. I just look up their margin rates because I clear through them a lot. And then on their 10-year Treasury Note they have it set for $1,250 is the initial.
But really if you want to do a day trade they only take a half of that. So $1,250 divided by two. So for $625 if it’s a day trade because it’s how they get it setup.
Every broker is a little bit different but the minimums are the minimums so I would say you’re going to have to have at least $1,250 if you want to trade one contract of a 10-year note.
And futures broker are all over the place. Just go find you one and say you want to trade these things. And then I’ll take you through with some lessons here with the two to three videos on how some of these stuff works.
Mark Helweg is going to be doing a live on core webinar presentation on ”Why This Hedge Fund Manager is Telling Friends and Family to Exit Stocks.”
Webinar is going to be Saturday, February 27th at 11AM EST.
Good luck. Hope it helps. I will HYPERLINK you over to the registration page.
Hubert.
