- Wealth PMS
We have started a video series on bonds, where we’ll explain the bond market and its nuances in an ELI5 format. This is the 4th part of the Bond Baba video series.
Bond Baba #1: An introduction to bonds
Bond Baba #2: G-Secs, Tax Free Bonds and 54 EC Bonds
Bond Baba #3: Convertible, Callable, Puttable, Floating Rate, and ZCBs
In today’s video, we will talk about an an insanely leveraged interest rate futures product.
Between 2014 and 2017, the 10-year bond yields (India) fell from 9% to 6.25%, and then went back to 8% by end-2018. They are now back to 6.78%. Bond prices, meanwhile, moved massively.
Can we make money from such a trend? And secondly, can we also make money when the yields rise?
The answer is interest rate futures!
(Read our detailed post on the Interest Rate Future)
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That’s all for now folks but we will discuss a lot more in this series in the subsequent videos. You can find me on twitter @AstuteAditya