Trade the world’s most popular and liquid fixed income securities from the United States, the UK, Europe and Japan on MetaTrader 4 and 5.
IB Markets Bond CFDs are based off fixed income debt securities that pay investors a regular coupon in exchange for their investment. We offer the bonds products as a CFD with flexible lot sizing, so you can speculate on the price of the Bond by going long or short.
There is no interest debited or credited on these Bonds CFDs, just like the underlying Futures markets that they’re based off. Again, this means you only have to worry about the price of the bond and whether you go long or short.
Bond CFDs provided by IB Markets are based off highly rated government issued debt securities, including governments of the United States, Japan and Europe. Bonds offer traders the opportunity to speculate on interest rates and risk on/off sentiment, diversify a portfolio or reduce risk and build defensive positions during periods of economic weakness or uncertainty.
Over 6 Bonds available to trade
Spreads as low as 0.5 pips
MetaTrader 4 and 5
How Does Bonds Trading Work?
Bonds are part of the fixed income asset class.
Bonds pay a regular fixed coupon to the bondholder and can be sold in secondary markets. Governments issue bonds to finance government spending on projects such as public infrastructure.
Traders generally trade bonds on the basis of future interest rate expectations.
If a central bank increases interest rates, bond prices will decline and yields will increase.
Bonds Trading Example
Selling: 5-Year U.S Treasury Note
The gross profit on your trade is calculated as follows:
Gross Profit on Trade
Opening the Position
You hold the view that the US Federal Reserve will increase Interest Rates and 5-Year Treasury yields will increase as a result.
You sell 10 contracts of March 2017 5-Year US Treasury Note at 120.25.
The value of your position is €200,000 x 1.33623 = USD $267,246.
The leverage on your trading account is 1:100 therefore the margin required to open the position is USD $267,246 / 100 = USD $2,672.46.
Closing the Position
Your view is correct and March 2017 5-Year T-note prices decline.
Note: For Bonds with a contract size of 200, it means every 0.01 move in the Bond CFD is worth US$2.
|ITBTP10Y||BTP Italian Bonds||0.05||0.05|
|JGB10Y||Japanese 10 YR||0.1||0.1|
|UKGB||UK Long Gilt||0.03||0.03|
|UST05Y||US 5 YR T-Note||0.06||0.06|
|UST10Y||US 10 YR T-Note||0.06||0.06|
|UST30Y||US T-Bond (30 year)||0.06||0.06|