Quote from SethArb:
what is a typical bund move vs a zb move overnight?
2 -3 ticks vs 1 tick ? 5 ticks vs 1 tick ?
If only it were so simple.
Sometimes bonds will react immediately and violently to a move in bunds. Othertimes, they seem to ignore the bund movement. No doubt there is a great degree of correlation, but I have watched this and there are definately times when the bond/bund traders are each of their own mind. Sometimes watching the bonds not react to the bunds can give one a clue as to where the market is going. At other times, the lack of reaction is a matter of delay, and when the reaction comes it comes quite violently.
Pull up a bond/bund chart from Wednesday night just around the open (2:00 am EST) and, looking at a 1 minute chart, you'll see that although each of the bonds/bunds/notes sold off, there was not perfect unison.
One thing's for sure, though, the bond/bund/note combo often provides a far more interesting overnight ride than do the e-minis; if you've got the stomach for them.
E-mini traders be forewarned; moves come fast and strong, and there are times where pullbacks are non-existant.
