I've been trading bonds for a while and I've been profitable on them for over 2 months because, in essence, trading is trading. However, this is a really stupid question because I'm not even entirely certain what's being traded on bonds. Like in ES 0.25 represents one tick of one index point of the cash value sp500. My understanding is that each tick of ZB/ZN/UB is representing a fluctuation in interest rates, or perhaps it is a fluctuation of the notional value of the contract of an actual bond and interest rates affect the bond price itself. My understanding is that the "price" represents the yield curve itself, but then again what does that mean, interest rates, the amount the bond yields? Sort of a dumb question definitely, but I should still know by now. Thanks


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It is the price of the bond.

Makes sense, so then do you mean $152,000 in that case or


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Raider 

I've been trading bonds for a while and I've been profitable on them for over 2 months because, in essence, trading is trading. However, this is a really stupid question because I'm not even entirely certain what's being traded on bonds. Like in ES 0.25 represents one tick of one index point of the cash value sp500. My understanding is that each tick of ZB/ZN/UB is representing a fluctuation in interest rates, or perhaps it is a fluctuation of the notional value of the contract of an actual bond and interest rates affect the bond price itself. My understanding is that the "price" represents the yield curve itself, but then again what does that mean, interest rates, the amount the bond yields? Sort of a dumb question definitely, but I should still know by now. Thanks Sent from my iPhone using NexusFi

The ZB is noted in 1/32 of a point - i.e. 152'00 means 152 + 0/32.
Contract specs: U.S. Treasury Bond Futures Contract Specs - CME Group

I understand that part, but the price of the bond futures, would that make the notional value $152,000 then ?


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Read the details direct from the contract owner sites(CME) AS REFERENCED ABOVE.

In summary:
Each tick on the ZB contract is $31.25.
With 32 ticks to a point, a point move is $1000.00. With the price of the bond future being 152'00 the contract value is $152,000.00.

Yield and price for bonds work inversely. As price of the bond goes up, the yield falls and vice-versa.
Hope that helps.

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Thanks ! My questions were answered.


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