Abstract

The paper discusses the peculiarities of trading in one type of derivatives - options on bond futures contracts. The mechanism of options trading is described and defined, as well as the possible strategies for risk management by buying them on these contracts. Underlying such strategies are various variations and modifications of spread, straddle, strangle and some variations of synthetic positions. In general, options strategies on bond futures contracts concentrate on limiting the potential for losses from unwanted changes in bond futures market rates.