Eurodollar Spreads/ Eurodollar

Fandyur,

Thanks for starting a EuroDollar dialogue. This is really cool because there is just not that much information out there about Euros.

I haven't traded EuroDollars, but I have been studying the market for a while and collecting data on spreads, fly, double flys, ect. And think trading EuroDollar spreads is such a more logical way to look at the market and rational way to trade, rather then trying to gamble on the direction of those crazy equities.

My question to all EuroDollar spread traders is: How do you go about trading these spreads? What brokers or clearing firms do you go through, that will give a commision structure that makes this a profitable way to trade? The best commisions I have found so far is around $3.50 per contract per RT.

If anyone has any information or would like to exchange more info about Euros, please feel free to email me: wsloan@rcn.com
 
anyone here trade the ED/ZN spread for intraday trading and how do you decide weather you want to be long or short the spread
 
There are alot of ways to spread Euros. The GE contract is the ultimate spreading contract alive. I've worked this market for years and with the low margin charged, you can do real well. Look at spreading strips to sprips, packs to packs and legging cal spreads while leaning on the implied markets in the back months.
 
I guess it depends on how much more every one continues to reduce the probability that the fed will cut rates. there is not really any big numbers this week, but if any of those numbers come in and suggest a weaker economy, this fly could reverse pretty quickly.

It will be interesting to see what the 10 year does this week... worst G.D.P. since 2002 and the 10 year sells off... ??? The market seems pretty confident that the fed is not going to cut and even might raise.

Does anyone remember what G.D.P. was at the time of the last rate hike before the tech bubble burst?
 
Quote from Frank Thomas:

The market seems pretty confident that the fed is not going to cut and even might raise.
More...
EDZ7 is already pricing in a reasonable chance of a raise. I've been in the raise camp for a while. Inflation is only "tame" if you ignore fuel and food--last I checked, everyone needs fuel and food.

- GDP deflator was much worse than expected.
- Companies are still reporting strong earnings.
- Money is incredibly cheap. The endless onslaught of mergers, stock buy-backs, and private equity (LBO) deals are testament to 5.25% not holding the economy back at all.
- Employment is nearly full.

Most important, who is buying bonds at 5% when the stock market is on a skyrocket to who-knows-where?

When the market starts to teeter, look for FI to bounce.

Bottom line: Money is cheap, inflation is bigger than reported. This points to a raise.
 
Quote from FullyArticulate:

- Money is incredibly cheap. The endless onslaught of mergers, stock buy-backs, and private equity (LBO) deals are testament to 5.25% not holding the economy back at all.
More...

The items you quote can all be traced back to Japan's (near) zero rate policy.

Basically, Japan's policies (free borrowing in Yen coupled with "guarranteed" steadily declining Yen) are creating the conditions which fuel asset bubbles around the world and all the imbalances in the real economy.

Because, one can be pretty sure that if/when Japan's interest rates normalise, the untold billions of debt used for buy-backs, LBO deals etc will either cause massive bankruptices or necessitate government intervention (i.e. bail outs) and the taxpayers will foot the bill (as usual).

Obviously for many years now the biggest losers have been Japanese savers / households.

But the mercantilistic policies of Japan and China are doing a lot more damage to the western economies than meets the eye.
 
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