This article is pure bullshit. > In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world So what? Most tr

This article is pure bullshit. > In one moment, an invisible trader placed a single trade that moved the most liquid debt market in the world So what? Most trades move the market, even in super-liquid ones. You hit the bid or offer in "market" size, the bid-offer will prob move a tick or two. > The value of the trade was about $850 million dollars. No it's not. A futures trade is "on-market", that is it has ZERO value. If yields don't move, his P&L will be zero. What he's done is take the equivalent risk of shorting $850m 10y. > In simple terms, if that was a direct bond buy, no one would be talking about it. Yes exactly. And taking the same position in futures is no different. The risk profile is almost exactly the same. 1bn 10y is large-ish, but by no means uncommon. > However, with the use of futures, you have to have margin capacity behind the trade. Yes, and so what? I don't know what the margin requirements are for 10y futures, probably about 1% of notional, ie $8.5m . Ie the guy has taken a $850m exposure for an initial outlay of 8.5. That is a heck of a lot easier on the bank account than buying them outright. (Edit: of course he's not buying them, he's selling them. But to sell (short) the physical bonds he'd have to borrow them in the repo market, where you loan cash and take the bond as collateral. Either way you need $850m in cash) > That means with a single push of a button someone was willing to commit more than $1 billion of real capital No they weren't. His initial outlay is the margin. That is it. Given there is an upper limit on a bond price (the 0% yield price) his possible losses are capped at something way, way, way less than a $1bn. Let's say the 0% yield price is $105 per 100 notional (i've no idea if this is right, but is approximate enough for this example), then his possible losses are capped at ~5% of notional. > You only do this if you see an edge Huh, what? This trade could be for any number of reasons. It could be closing out an existing position, hedging a long physical position (thus taking a position on the spread) or yes maybe an outright punt. But it's hardly earth-shattering. Any mid-sized bank could do a trade like this, and often do. Edit: re-reading I've just noticed that the article implies this trade could pay-off 10-1 netting the guy 10bn. This is so wrong as to be laughable. The most this guy could make is $850m, and only if the price of treasuries goes to zero! Completely impossible. If the US loses it's AAA rating prices will prob move a dollar or two, e.g go from $98 -> $96 for example, ie he'll make a couple of % of notional. In short, total nonsense.