German Bund spread betting

The German Bund is a fixed-interest security issued by the German government to finance its debt. It is used as the benchmark of the European denominated debt. The difference between the German goverment Bund and another European debt, is known as the spread.   Many spread betting companies allow you to spread bet the German bund in both directions for hedging purposes and for speculative purposes.

Bond prices move in the opposite direction of interest rates. Therefore if you expect the EU to cut interest rates you will expect the bond prices to rise. In this case you would place a ‘buy’ trade on the German Bund futures. If instead your expect the interest rates to rise your would sell the Bund futures. Be aware you are spread betting on a long-term interest rate and not on a bank base rates. Generally the longer dated the bond the higher the uncertainty, the more volatile the market can get.

Bond futures are less known in the spread betting arena, but they do offer still plenty of opportunity, especially in uncertain economic times. The markets will seek a flight to safety, creating solid trend within the interest rate financial markets. Example during the collapse of financial markets

Here you can learn a spread betting example of the German bund