Treasury Bonds have always attracted trading interest both because their prices are volatile enough to provide trading opportunities and because the market is liquid enough to absorb orders of any size - from one contract to 100 contracts or more. Treasury Bonds and, more generally, U.S. government debt securities are held by private and public organizations, hedge funds, pension plans, insurance companies and even domestic and international governments. This wide investor base provides liquidity virtually around the clock and creates a fair and level playing field for all participants. Regular sales of bonds by the U.S. government to fund operations keeps this market liquid and viable.

Understanding Bonds
A bond represents nothing more than a stream of income: regular coupon payments and then the principal payment at bond maturity. For example, a $100,000 30-year bond having coupon 6% would pay to the holder interest income of $6,000 every year and then $100,000 at maturity in 30 years. Treasury Bonds are backed by the financial credibility of the U.S. government who guarantees that payments will be made.

Bonds are quoted in terms of $100 of face value. In the example above, if this bond were trading exactly at 100, then a buyer would receive 6% annually for 30 years. However, it is often the case that buyers demand a different rate of return. If investors desire a higher rate of return, then the price of this bond will trade at a price below 100, for example, at 97. This has the effect of driving up the implied rate of return, also called the yield to maturity, to a value of say, 6.20% The bond's price will continue to fall, and the yield to maturity will continue to rise, until investors are content to buy the bond. On the other hand, if the bond's coupon seems very attractive, then investors may bid up the price of the bond say to 103. This will lower the yield to maturity to say, 5.80% and subsequently reduce the demand for the bond.

In practice, it is rare that a bond trade exactly at par, that is, exactly at 100. This is because the rate of return that investors demand often changes especially in response to new information on the economy. Falling bond prices mean that interest rates corresponding to that bond are rising while rising bond prices mean that interest rates are falling. In other words, bond prices and interest rates move in opposite directions.

Trading Treasury Bonds
Treasury Bond prices are influenced by economic data such as employment, income growth, and overall consumer and industrial prices. Any data which supports expectations of rising inflation tends to weaken Treasury Bond prices because inflation erodes the present value of the stream of income that the bond provides. You will almost always see the bond market drop during a time of heightened inflationary concerns.

Treasury Bonds are also viewed as a safe-haven investment. Consequently, they often rally during times of international financial crises. Investors, both domestically and internationally, value the credit guarantee of the U.S. government and this gives Treasury Bonds great appeal when the credit quality of other borrowers - including other governments - falters.

Paul Judd, a registered Commodity Trading Advisor (CTA) and Commodity Pool Operator (CPO), is an author, teacher and most importantly, trader. He focuses all of his attention on one and only one market: 30-year Treasury Bonds. He has a long history of helping and teaching traders. For instance, his Bond Strategy Course was for a long time offered side-by-side with Larry Wiliams' famous course for beginning traders promoted by British American. Paul has successfully presented more than 40 live, all-day seminars on the subject of bonds during the past 5 years. He has been studying the bond market for over 14 years and over this period has passed through all the steps common to experienced traders; from the initial step of researching and studying, to trading and losing, and finally to refinement of strategy. He has persisted where others might have given up and as a result, has achieved considerable skill and expertise in the Treasury Bond market. He has developed a proprietary trading model refined by his own trading experiences that he uses daily and that forms the basis of his bond trading methodology.

Paul Judd's Trading Group Program

Paul Judd has a unique, one-on-one program for his personal group of bond traders. This is how it works:

• He works with you personally from start to finish on each bond trade.
• You put on the trades in your own account, following his recommenation.
• You're in complete control of your own trading account.
• He'll tell you if he's bullish or bearish.
• He'll tell you when to take profits.
• He'll instruct you in risk management techniques.
• Each trade is set with contingent orders, so you don't have to watch the market all day.

You can get started with just one futures contract, meaning that this program is accessible for traders who have even a modest-sized trading account.

Ask yourself this question... Would you rather trade the bond market on your own? ... Or with someone like Paul Judd who has years of knowledge and experience?

Ready to take the next step? Then go ahead and Talk to Paul Judd in the box above. He'll help you decide if trading Treasury Bond futures is right for you.