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Are Interest Rates the New Crypto?!

Feb 24, 2021

By: Frank Kaberna

Interest rate markets aren’t “new” or “in vogue” or “what Elon Musk is tweeting about,” but they are moving. Just two months into 2021, ephemeral infatuations with Shiba Inu-based cryptocurrencies and video game retailers have subsided, but yields have continued to keep pace with more enduring trends like the bullish run in Bitcoin.

What is new? Small Yield Curve futures that provide three flavors and an overall simpler experience when trading interest rates. The Small Exchange has launched Small 2YR, 10YR, and 30YR Treasury Yield futures that give the everyday trader easier access to an oldie but a goodie in interest rates.

 

The Single Scoop

Traditionally, the yield curve is upward sloping, which means shorter-term rates are lesser than longer-term rates. This is the current case in the US when you compare 2YR yields of 0.11% to 2.06% in the 30YR ($1.10 and $20.60 in S2Y and S30Y, respectively).*

Screen Shot 2021-02-23 at 1.16.32 PM.png

And thus the three yield flavors from the Small Exchange come in three sizes! Is the bowl of S30Y too large? Check out S2Y! On their own, Small Yield products let you speculate on the future landscape for interest rates in general.


The Sundae

Is one yield not enough? The world of flatteners and steepeners can be an exciting one, and now it’s a straightforward one thanks to the Smalls. Yield-based futures with the same multiplier ($100 for Smalls) make DV01 and trade ratios a thing of the past.

Whether it ends up being interest rate markets versus the Fed or Elon Musk or even a Shiba Inu, one thing is for certain: this age-old asset just got a major facelift.

Bitcoin and 10YR US Treasury Yield(coin)

sm0223.png

Source: dxFeed Index Services (https://indexit.dxfeed.com)

 

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Save Every Time You Trade the Smalls

The Small Exchange has also created a limited number of subscriptions for a one-time payment of $100 that give traders a lifetime of reduced exchange and market data fees when trading the Smalls.

For more information on the Small Exchange’s products and subscription service, visit smallexchange.com. And be sure to check out my new show on tastytrade, Small Stakes, where Pete Mulmat and I will show viewers how to navigate Small Exchange products every Monday-Friday and always on demand.

If you’d like to find out where to trade the Smalls products check out the list of brokers that offer their products, or tastytrade’s preferred broker tastyworks.


*Treasury yields (https:/treasury.gov) and index values (https://indexit.dxfeed.com/) taken on 2/17/21

†Product size and initial margin from Small Exchange taken on 2/17/21

© 2021 Small Exchange, Inc. All rights reserved. Small Exchange, Inc. is a Designated Contract Market registered with the U.S. Commodity Futures Trading Commission. The information in this advertisement is current as of the date noted, is for informational purposes only, and does not contend to address the financial objectives, situation, or specific needs of any individual investor. Trading futures involves the risk of loss, including the possibility of loss greater than your initial investment.


Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

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