Bond Futures Options Trade Example

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Please only use these examples for educational purposes.
Paper trade them.

I was doing my search for option inconsistencies and
here is what I found.

I am looking at how much an option costs per day compared to an
option from a different month in the same futures market.

April T-Bond futures contract closed at 144-12.
(April options follow the June futures contract)

April T-Bond options have 57 days left until expiration.
June T-Bond options have 120 days left until expiration.

April T-Bond 133 Put options settled at -04.
June T-Bond 133 Put options settled at -23.

The June 133 Put is 5.75 times more expensive than
The April 133 Put, but it ONLY has 2.1 times more time left.

When putting on any calendar spread, buy the cheaper cost
per day options and sell the more expensive.

Even if you are not putting on a spread, this is a great way to
choose which option to buy or sell.

For more information on these non-directional option
techniques, click below:


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