May. 30th, 2021

dennisgorelik: 2020-06-13 in my home office (Default)
/ZT Futures represent 2000x leverage of change in interest rate of 2-Year Treasury note.
For every 1% increase in interest rate, 1 /ZT Futures contract grows in price $2000.
For every 1% decrease in interest rate, 1 /ZT Futures contract drops in price $2000.
But current interest rate on 2-Year Treasury note is only a measly 0.14%
The probability that 2-Year Treasury note interest rates will go negative -- is very low.
Even if the interest rate will go below zero - it will be like -0.005% (European deflation style).

https://www.cnbc.com/quotes/US2Y


/ZT Futures graph
https://finance.yahoo.com/chart/ZT%3DF


It seems that the risk of losing money on shorting /ZT Futures is much lower than the risk of making money on /ZT Futures.
"Down -0.14%" vs "Up ~7.5%" -- it is ~53 times difference in risk/reward.
This is a huge difference.

Am I missing any hidden problems with /ZT Futures short?

Update: /ZT futures - the catch

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dennisgorelik: 2020-06-13 in my home office (Default)
Dennis Gorelik

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