How much do you make if you are long 1 million of a bond and the price goes up with a tick?

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How much do you make if you are long 1 million of a bond and the price goes up with a tick?

why do you divide (1000000*1/32)/100?

why the "over 100"?

2006-08-01 11:13:18 · 3 answers · asked by Ani 1 in Business & Finance ➔ Investing

3 answers

100 is the assumed face value of a bond. 312.5

2006-08-01 13:37:57 · answer #1 · answered by J 4 · 0⤊ 0⤋

Yes, you are correct. Or a simplier way to view it is this:

1 bond contract is $100,000. 1 full point is $1000 and 1 tick is 1/32 of a point. So if you have $1 million in bonds, you'd have 10 bonds or bond contracts. 1 tick is 1/32's of a point and 1 point is $1000 so 1 tick is $31.25. So if you have 10 bond contracts at $31.25, your 1 tick move translates to $312.50.

2006-08-02 08:02:24 · answer #2 · answered by 4XTrader 5 · 0⤊ 0⤋

Its over 100 because that is the definition of a percent.

2006-08-01 19:34:09 · answer #3 · answered by STEVEN F 7 · 0⤊ 0⤋