Options offer tremendous flexibility to pursue speculative strategies on a finely designed basis. In particular, CME Group lists options exercisable for 2-year, 5-year and 10-year Treasury note futures; as well as options exercisable for “classic” and “Ultra” T-bond futures.
These option contracts generally offer a high degree of liquidity, transparency, price discovery and are accessible through the CME Globex® electronic trading platform.
This document is intended to provide a review of the fundamentals of CME Group Treasury options; and, a discussion of the ways in which these options may be utilized to pursue well defined speculative strategies in a wide range of market environments. While our examples focus on the use of options exercisable for 10-year Treasury note futures, the principles illustrated are generalizable to all our options on Treasury futures and options exercisable for other instruments as well.