Please can i have some advice on trading spreads

[tommog]

HI,

I am just starting to be introduced into trading spreads Bund Bobl for now but will be moving onto energy soon. I've only been doing it a couple of days and have only ever traded outrights before so this is a start of another learning curve for me.
But i am having difficulty getting the prices i want i was hoping some of you guys that have been around spreads could give me some advice because i havent been given much advice on getting into and out of spreads just pretty much told what i should be looking to do and told to teach myself.

For example say i want to buy the spread. I need to buy Bobl at 65 sell Bund at 53 (for example), now assume Bund only has 500 on the offer i can get them but Bobl has 2000 on the bid, i dont stand much chance of getting them before the Bund so chances are i'm left with a bund outright trade i dont want. This scenario is one of the few varieties of problems you face trying to get a spread on.

I was hoping i could get some advice trying to get into and out of a spread.

Many thanks

Tom

 

[charliechan]

twalker has been very helpful on this in the past - he has posted quite a bit of stuff a while back on this.

 

[tommog]

Hi

Why would you switch to spreads from out-rights? Are you taking a longer term view and so are looking for margin offset? You get more bang for your buck doing out-rights.

Thats true but trading outright also brings along its own headaches, depends on your style and how you like to trade i suppose.
I trade at a prop house and have always traded fixed income outright but there are so many locals in this market i am interested in looking into some more alternative markets, there are some very good opportunities in some of the commodity markets particularly on the arb/spreading side of it. I've been advised to spend some time on Bund Bobl spread to let me get the feel for spreading but have pretty much be left to experiment on my own and am interested in getting advice on the best way to leg into and out of spreads and just general tips.