Example - Treasuries

Selling US T-Bonds

Imagine market is showing a price of 113.60/113.66 for the Dec US T-Bond. Our principal’s prices the T-bond in decimals to 1/100th of a point, rather than 1/32 as per the CBOT exchange.

You believe interest rates will rise and place a sell of 10 CFDs at the bid price of 113.60.

Opening Trade
Price Shown	113.60 (Bid) / 113.66 (Offer)
Sell Price	113.60
Number of Contracts	10
Margin Required (2%)	$2272.00
Commission	$45.00

The rate announcement in the afternoon results in interest rates going up. You decide to close the position at 112.80 to realise your profit on the 80 point movement

Closing Trade
Price Shown	112.74 (Bid) / 112.80 (Offer)
Buy Price	112.80
Price/Point Movement	80 points
Gross Profit/Loss	80 x $10 = $800 profit
Net Profit/Loss	$800 - $45 = $755