Lets quantify this: What are the margins for these three instruments and what does this price action mean for (1) futures contracts? Please do not think I am implying that all my clients got short and stayed with this trade for the last 4 months. That is not the message I am trying to convey.
- Initial margin - $2,750
- Maintenance margin - $2,500
- Close to close for 5/2 to 8/22 - $17,875
- Initial margin - $1,623
- Maintenance margin - $1,475
- Close to close for 5/2 to 8/22 -$8,609
- Initial margin - $880
- Maintenance margin - $800
- Close to close for 5/2 to 8/22 -$3,050
Over the next several years I do expect the path of least resistance in the debt complex to be lower, so traders should use an advancement in the coming weeks to exit remaining longs and to gain bearish exposure.
March 16’ Eurodollars:
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