Gain exposure to long-term global interest rate changes with our range of major government bonds.
Our government bond contracts enable you to take advantage of the inverse relationship which tends to exist between long-term interest rates and bond prices. The low margin rates of our bond CFDs also make them suitable to hedge your existing government bond holdings.
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In addition, we offer 3-month interest rate CFDs for trading short-term interest rate changes.
OTC flexibility
Because our contracts are off-exchange, you can choose to deal in fractions of contracts (provided you deal in at least the minimum size of one contract).
Online dealing
Every interest rate and bond contract that we offer can be dealt online, offering immediate execution, Stop and Limit Order facilities and sophisticated technical analysis tools.
Wide range of contracts
Choose from a comprehensive selection of government bonds, including Gilts, Bund, Bobl and US Treasury Bonds or T-Bonds.
All our Rates and Bonds, are OTC products and are quoted on a forward basis with set expiry dates at which the position will automatically close. There is no commission to pay: all our charges are in the dealing spread.
Buying the Bund
Opening the position
You believe the price of the Bund will rise. You check the real-time price for our German Bund online; on 5 January 2010 the price is showing 12118/12122 and you decide to buy three contracts at 12122.
One contract is the equivalent of €10 per point (effectively a 1% change in the par value).
Closing the position
As you predicted, the price of the Bund rises. You check our current quote on 13 January 2010 and we are making 12223/12227. You close your position by selling three contracts at 12148.
Your profit on the trade is calculated as follows:
| Profit on trade | |
|---|---|
| Closing level | 12223 |
| Opening level | 12122 |
| Difference | 101 |
| Profit: 101 points x 3 contracts x €10 per point = €3030 | |
Of course, had the market moved in the opposite direction, you would have made a loss that may have exceeded your initial deposit.
Selling the Bund
Opening the position
You believe the price of the Bund will fall. You check the real-time price for our German Bund online; on 5 January 2010 the price is showing 12118/12122 and you decide to sell three contracts at 12118.
One contract is the equivalent of €10 per point (effectively a 1% change in the par value).
Closing the position
Against your expectations, the price of the Bund rises. You check our current quote on 11 January 2010 and we are making 12170/12174. You decide to cut your losses and close your position by buying three contracts at 12174.
Your loss on the trade is calculated as follows:
| Loss on trade | |
|---|---|
| Closing level | 12174 |
| Opening level | 12118 |
| Difference | 56 |
| Loss: 56 points x 3 contracts x €10 per point = €1680 | |