ZN Tick Question

L

Luto

Hello,

I am starting to investigate trading ZN and am working on the logistics. Since I use TS and IB, I use YN04M and ZN04M to monitor the electronic contract.

However, and I apologize for such a simple question, I can't reconcile the CBOT contract description with the IB-Ticks.

On CBOT's site they say a ZN tick is "One half of 1/32 of a point ($15.625/contract) rounded up" So the implication is there are 64 ticks per point.

However, when I get a quote, it moves in .005 increments. E.g. Bid 108'170 and Ask 108'175.

Question is:

1) what does a .005 increment mean in relationship to a "point"?
And how much is it worth?

2) What does the " '170" mean in a quote of 108'170

3) what constitutes a "point". I thought 108'000 to 109'000 was a point, but obviously that is not correct.


I am just trying to figure what a 1 tick spread is worth in dollars in order to see what type of stop and targets are reasonable for day trading scalping positions.

Any help is greatly appreciated so I can get off the ground at least. :confused:
 
Personally, the quotation format of the interest rate complex at the CBOT irritates me. The bunds at the Eurex have a simpler quotation system.

Let me do my best and explain.

For ZN: each tick is 1/64 - 0this is represented in quote form as ABC-XYZ where Z is always 5 or 0. When Z is 5 it means half a tick. X can be any number between 0 and 3, Y can be any number between 0 and 2.

So for example a quote of 107-270 means 107 and 27/32

A quote of 107-275 means 107 and 27.5/32 which is equivalent to 55/64.

Each tick is worth $15.625.

A full point is 32/32 or 64/64 – and is equal to $1000.

So a full point could be from 107-270 to 108-270 or 106 -125 to 107-125 NOT 106-125 to 106-135.

Again note that a point is 32/32 or 64/64 while a tick is .5/32 or 1/64.

I am quite tired right now, so this may not be the best explanation, but hopefully it helps you.
 
CPTrader thanks for taking the time, esp when about to call it a day.

The form:

" ABC-XYZ where Z is always 5 or 0. When Z is 5 it means half a tick. X can be any number between 0 and 3, Y can be any number between 0 and 2."

Makes sense if one assumes the maximum value of XY is 32 and that Y can be any value from 0-9 and not 0-2. E.g. 108'24.5 is a valid quote meaning 108 24.5/32 or 108 49/64.

Thanks for the help and anyone please feel free to correct me if I am not reading this correctly.
 
Quote from Luto:
CPTrader thanks for taking the time, esp when about to call it a day.

The form:

" ABC-XYZ where Z is always 5 or 0. When Z is 5 it means half a tick. X can be any number between 0 and 3, Y can be any number between 0 and 2."

Makes sense if one assumes the maximum value of XY is 32 and that Y can be any value from 0-9 and not 0-2. E.g. 108'24.5 is a valid quote meaning 108 24.5/32 or 108 49/64.

Thanks for the help and anyone please feel free to correct me if I am not reading this correctly.
More...
Using your example format - XY should be taken as a unified two digit number (not two independent #s as it sounded like you were thinking) and ranges from 00 to 31 and Z can be either 0 or 5.

Basically, in the price format is XXX'YYY and you interpret the YYY (fractional part) as YYY/10 32nds.
 
Quote from Luto:

CPTrader thanks for taking the time, esp when about to call it a day.

The form:

" ABC-XYZ where Z is always 5 or 0. When Z is 5 it means half a tick. X can be any number between 0 and 3, Y can be any number between 0 and 2."

Makes sense if one assumes the maximum value of XY is 32 and that Y can be any value from 0-9 and not 0-2. E.g. 108'24.5 is a valid quote meaning 108 24.5/32 or 108 49/64.

Thanks for the help and anyone please feel free to correct me if I am not reading this correctly.
More...

Actually, XY can have a maximum value of 31. For example you have ticks from 107-300 to 107-305 to 107-310 to 107-315 and then to 108.
 
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