Thread: TED Spread

I am a new trader working at a prop house and trading th TED spread, Euribor against Schatz. Just wanted to know if anyone out there has any advise or anything that could help me.

Noticed that there isn't all that information out on the market, but would just like to know if anyone out there has experienced this product?

Any help would be greatly appreciated!

I have experienced this product... It definitely was not as good for me as it was for the product .

thats not a good sign, but how long did you trade it?

Arnd 5yrs now... Feels more like 20 sometimes .

At the moment I trade Schatz Jun10 against Mar 11 Euribor

how are you finding the trade Flyman? i was taught to trade this as a mean reverting trade, but as you can understand its not quite been moving that way!

The TED spread, aka the death spread, is a directional trade. It only appears on a chart to be mean reverting as the market ebs and flows back and forth throughout the day. Look for a trend day in the euribor 5th contract, and you'll see just how mean reverting it isn't. Of course, like any spread, it does over extend at times, due to order flow in one side or other, so there are definately times when fading it is a great trade. However, with the current environment and when eu govvies are blowing out, there will always be more demand for 2yr german bonds than euribor.... so maybe going long all you can in a rallying mkt is not such a great idea

average, then average summore, then average again. then pyramid in one last ditch effort to cover your commissions. You either Scratch it or have a chat with Risk.