Types of Interest Rate Markets
Interest rate markets can be accessed in the form of cash or spot, ETF shares, or futures. Most cash or spot Treasury products are only accessible by large institutions, and they tend to carry a large size. ETFs such as TLT and TBT can be easier for the everyday trader to consume, but the way they look is not directly related to a Treasury yield or price. In comparison, futures can be low-cost, direct avenues to trading interest rates.
Example US Treasury Yield Markets
- Small 2YR US Treasury Yield Futures (S2Y) let you access the 2 Year US Treasury Yield in a relatively small, low-cost product that moves in $10 increments per 0.01% (or 1 basis point).
- Small 10YR US Treasury Yield Futures (S10Y) let you access the 10 Year US Treasury Yield in a relatively small, low-cost product that moves in $10 increments per 0.01% (or 1 basis point).
- Small 30YR US Treasury Yield Futures (S30Y) let you access the 30 Year US Treasury Yield in a relatively small, low-cost product that moves in $10 increments per 0.01% (or 1 basis point).
- 2-Year T-Note Futures (ZT) are a more traditional product tracking the 2 Year US Treasury Note price in $7.81 increments per 1/8 of 1/32 of one point.
- 10-Year T-Note Futures (ZN) are a more traditional product tracking the 10 Year US Treasury Note price in $15.53 increments per 1/2 of 1/32 of one point.
- U.S. Treasury Bond Futures (ZB) are a more traditional product tracking the 30 Year US Treasury Bond price in $31.25 increments per 1/32 of one point.
