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(Chart courtesy of optionsHOUSE )
Stocks went on a wild ride yesterday, and fixed-income prices followed close behind.
ESZ5 (Dec '15) S&P 500 e-mini futures initially surged more than 1 percent from their morning lows, stalled slightly before Tuesday's high and then plunged more than 40 points into the afternoon. Their peak occurred at 10:35 a.m. ET.
ZBH6 (March '16) T-Bond futures hit their low for the session 10 minutes later, and quickly started to climb as equities fell. They stalled around the same time that ES bottomed.
While stocks and bonds often move in opposite directions, yesterday's fluctuations were unusually coordinated. It also came despite a weak auction for shorter-term Treasury notes with investors expecting a rate hike by the Federal Reserve next week.
Every point in ES controls $50 in client accounts, so a trader catching the entirety of yesterday's move would have made over $2,000. The initial margin requirement is $5,060. ZB contracts represent $1,000 and require $3,960 upfront to place a trade.
For more information on futures, please visit The Futures Institute (Powered by CME Group) .
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
