Trading bond CFDs: the Bund, Gilt and US Treasury note explained

A bond CFD is a contract for difference that tracks the price of a government bond, almost always via a bond futures contract such as the German Euro-Bund, the UK Long Gilt or the US 10-year Treasury note future. You gain or lose on changes in that futures price. Because bond prices move opposite to yields, a long position benefits when yields fall and a short position benefits when yields rise.

The general relationship between bond prices and yields, duration and the curve is covered in bonds and yields explained. This guide is about the practical side: what the three most common bond futures are, how to read their prices, how to turn a view about yields into a stop and a position size, and the costs and risks specific to bond CFDs.

Why bond CFDs track futures

Government bonds trade over the counter between dealers, in many separate issues with different coupons and maturities. There is no single price for "the 10-year Bund". Futures solve that problem: each contract is based on a standardised notional bond and trades on an exchange with one transparent price.

That makes futures the natural reference for a CFD provider. It also means bond CFDs inherit the features of futures: quarterly expiry, a price in points rather than a yield, and a contract size that is large compared with most retail accounts. The guide to commodity futures explains margin, expiry and rollover, and those mechanics apply to bond futures in the same way.

The three benchmark contracts

Euro-Bund (Germany)

The Euro-Bund future trades on Eurex. It is based on a notional German government bond with a 6% coupon and a nominal value of 100,000 euros, with deliverable bonds having roughly 8.5 to 10.5 years left to maturity. Prices are quoted as a percentage of nominal value, and the minimum price movement of 0.01 is worth 10 euros, so a full point is worth 1,000 euros per contract.

The Bund is the main benchmark for euro area long-term rates. Related Eurex contracts cover shorter maturities: the Schatz (around two years) and the Bobl (around five years). Some providers offer CFDs on these too.

Long Gilt (United Kingdom)

The Long Gilt future trades on ICE Futures Europe. Its unit of trading is 100,000 pounds nominal of a notional gilt with a 4% coupon, and deliverable gilts have between 8 years and 9 months and 13 years to maturity. The minimum price movement of 0.01 is worth 10 pounds, so a full point is worth 1,000 pounds per contract. Delivery months are March, June, September and December.

10-year Treasury note (United States)

The 10-year T-note future trades on the Chicago Board of Trade, part of CME Group. Its contract unit is 100,000 dollars face value. Unlike the European contracts, it is quoted in points and 32nds of a point, with a minimum tick of half of one 32nd, worth 15.625 dollars. A full point is worth 1,000 dollars per contract.

The 32nds notation confuses newcomers. A price shown as 110-16 means 110 and 16/32, or 110.50 in decimal. Many CFD providers convert the price into decimals for display; check which convention your platform uses.

Worked example: reading a T-note price

Illustrative prices. The future moves from 110-16 to 109-24.

• 110-16 = 110 + 16/32 = 110.50.
• 109-24 = 109 + 24/32 = 109.75.
• Change: 0.75 points, or 24/32.
• Per full futures contract: 0.75 × 1,000 = 750 dollars.

Other US contracts cover the 2-year, 5-year and 30-year areas of the curve. Providers vary in which they offer.

Price, not yield

Bond futures prices do not show yields. A Bund future at 130 does not mean a yield of anything in particular; it reflects the price of the cheapest bond that can be delivered into the contract, adjusted by a conversion factor. Two consequences matter for CFD traders:

• Direction is inverted. If you expect yields to rise, you sell the future. If you expect yields to fall, you buy it.
• You need to translate. Most macro views are expressed in yields ("the 10-year could rise 20 basis points"), so you need a way to turn a yield change into a price change.

Basis point value

The usual tool is the basis point value (BPV), sometimes called DV01: how much the price moves for a one basis point (0.01 percentage point) change in yield. A rough approximation is:

price change ≈ duration × price × change in yield

where duration is the modified duration of the bond, in years, and the yield change is written as a decimal (one basis point = 0.0001).

Exchanges and data providers publish more precise figures for each contract, based on the cheapest-to-deliver bond. The approximations below are illustrative only, to show the scale.

Worked example: basis point values

Illustrative durations and prices, not current market values.

• Bund: price 130, duration 8. BPV ≈ 8 × 130 × 0.0001 = 0.104 points. At 1,000 euros per point, about 104 euros per basis point per futures contract.
• Long Gilt: price 95, duration 7.5. BPV ≈ 7.5 × 95 × 0.0001 = 0.071 points. At 1,000 pounds per point, about 71 pounds per basis point per contract.
• 10-year T-note: price 110, duration 6.5. BPV ≈ 6.5 × 110 × 0.0001 = 0.0715 points. At 1,000 dollars per point, about 72 dollars per basis point per contract.

A 10 basis point move in yields, which is not unusual on a busy day, would therefore move one full Bund future by about 1.04 points, or roughly 1,040 euros. That is why a small change in yield can produce a large change in value on what looks like a slow-moving price.

Sizing a bond CFD position from a yield view

Worked example: a short Bund CFD

Illustrative numbers. Your account is 10,000 euros and you risk 1% per trade, so 100 euros. You think German 10-year yields could rise, so you plan a short Bund CFD position at 130.00. You decide the idea is wrong if yields fall by 6 basis points from here.

Step 1: turn the yield stop into a price stop. Using the illustrative BPV of 0.104 points, 6 basis points ≈ 6 × 0.104 = 0.624 points. Your stop goes 0.62 points above entry, at 130.62.

Step 2: size the position. CFD contract sizes differ between providers, so here are two versions.

• Provider A: 1 CFD = 1,000 euros per point (same as the future), minimum 0.1. Risk per contract at the stop: 0.62 × 1,000 = 620 euros. Size: 100 ÷ 620 = 0.16, rounded down to 0.1 contracts. Planned loss at the stop: 0.62 × 1,000 × 0.1 = 62 euros, well under your budget, because the minimum size is coarse.
• Provider B: 1 CFD = 10 euros per point, minimum 1. Risk per CFD: 0.62 × 10 = 6.20 euros. Size: 100 ÷ 6.20 = 16.1, rounded down to 16 CFDs. Planned loss at the stop: 16 × 6.20 = 99.20 euros.

Step 3: check the exposure and margin. With provider B, the position value is 16 × 10 × 130 = 20,800 euros, about twice the account. At a 20% margin rate, the margin is 4,160 euros.

So a 1% risk with a 6 basis point stop already means exposure of about twice the account. A wider stop means a smaller position, not more risk. The instruments position size calculator and margin calculator handle the arithmetic, and the profit and loss calculator shows the outcome at different exit prices.

Worked example: a fast day in gilts

Illustrative numbers. You are long 0.2 Long Gilt CFDs from a provider whose contract matches the future (1,000 pounds per point). Gilt yields jump 25 basis points in a session after an unexpected fiscal announcement. Using the illustrative BPV of 0.071 points:

• Price change ≈ 25 × 0.071 = 1.78 points.
• Loss: 1.78 × 1,000 × 0.2 = 356 pounds.

Moves of that size are uncommon but not unheard of. The bonds guide describes the UK gilt market turmoil of 2022, when yields rose very sharply in a few days after the government's fiscal statement. A stop placed on a normal-day assumption can be filled far away from its level in conditions like that.

Rolls, expiry and pricing

Bond futures have quarterly delivery months: March, June, September and December. Bond CFDs handle this in one of two ways:

• Dated CFDs expire around the same time as the underlying contract. You close or let the position expire and open a new one in the next contract.
• Rolling CFDs switch automatically to the next contract before expiry, usually some days before the first delivery-related date. The provider adjusts the position or books an adjustment so your open profit or loss is not distorted by the price gap between contracts.

The price difference between the front contract and the next one reflects carry: the coupon income on the deliverable bonds versus the cost of financing them. It can be noticeable. Read your provider's roll policy in the instrument details; the guide to CFD rollover and expiry explains the mechanics, and the contract specifications guide shows where to find them.

Because futures-based CFDs already include financing in the futures price, many providers do not charge daily overnight financing on them, and instead build costs into the spread and the roll. Policies vary, so check rather than assume. The comparison in index futures versus index CFDs covers the same trade-off for equity indices.

Leverage and margin

Under the European Securities and Markets Authority's product intervention measures, retail CFD leverage is capped by asset class. Government bonds are not named in the higher-leverage categories, and EU providers commonly apply the 5:1 limit for other reference values, which means a minimum margin of 20% of the position's value. The ESMA leverage limits guide explains the full set of caps, negative balance protection and the 50% margin close-out rule.

The UK's FCA rules differ from ESMA's in some details, and at the time the FCA said it would allow higher leverage on certain government bonds. Whatever the cap, the margin your provider actually charges is in the instrument details.

Low leverage limits do not make bond CFDs low risk. As the sizing example shows, a modest yield move on a position worth twice the account can still produce meaningful losses.

What moves bond futures

The forces are the same as for yields, described in the central banks guide, with a different emphasis for each market:

• Bund: European Central Bank decisions and communication, euro area inflation data, German fiscal policy and issuance, and spreads between German and other euro area government bonds during periods of stress, when the Bund can attract safe-haven demand.
• Long Gilt: Bank of England decisions, UK inflation and labour data, and fiscal events such as budgets, which proved highly sensitive in 2022.
• T-note: Federal Reserve decisions and guidance, US inflation and employment data, Treasury auction results and refunding announcements, and broad risk sentiment, when Treasuries can rally as investors seek safety.

All three react to the same scheduled data that moves currencies, so the approach in how economic data moves forex carries over: price moves on the surprise against consensus, not on the number itself.

The shape of the curve matters too. A 10-year future responds to the 10-year area of the curve, which can move differently from the 2-year area that is more tightly linked to policy rates. The guide to yield curve inversion explains how those parts of the curve interact.

Trading hours

Bond futures trade for long hours, but liquidity is concentrated in the home market's daytime session. Eurex and ICE Futures Europe contracts are most active during European hours; US Treasury futures trade nearly around the clock on weekdays but are most active during the US session. Your CFD can only be traded when your provider is quoting it, and spreads often widen outside the main hours. The market hours tool shows the main sessions in your time zone.

Common mistakes

• Getting the direction backwards. Expecting yields to rise and buying the future is a common slip. Rising yields mean falling prices.
• Sizing by price percentage instead of by yield. A move of 1% in a Bund future is a large move in yield terms. Convert your stop into basis points and back again.
• Ignoring the contract size. One full contract is a large position for most retail accounts; check whether your provider's CFD mirrors the future or is a fraction of it.
• Holding through central bank decisions or budgets without a plan. Prices can gap and stops can slip; see slippage explained.
• Overlooking the roll. A rolling CFD's price can shift at the roll, and the cost or benefit depends on the gap between contracts.
• Treating government bonds as safe because the issuer is. The credit risk of the government is low; the price risk of a leveraged position is not.

Most retail CFD accounts lose money. The risk warning explains the risks of leveraged trading, including in markets that look slow-moving.

Frequently asked questions

What is a bond CFD?

A bond CFD is a contract that pays the difference in the price of a government bond, usually tracking a bond futures contract such as the Euro-Bund, Long Gilt or 10-year T-note future, between opening and closing. You do not own the bond or receive coupons; you gain or lose on price changes.

If I think yields will rise, do I buy or sell a bond CFD?

You sell. Bond prices move opposite to yields, so a short position benefits if yields rise and prices fall. A long position benefits if yields fall and prices rise.

How much is a one basis point move worth on the Bund?

It depends on the price and the duration of the cheapest-to-deliver bond, so it changes over time. As an illustration, with a price of 130 and a duration of 8, one basis point is about 0.104 points, or about 104 euros on a full Bund future. Check the current figure from your provider or an exchange source.

What does a T-note price like 110-16 mean?

US Treasury futures are quoted in points and 32nds of a point. 110-16 means 110 and 16/32, which is 110.50 in decimal terms. The minimum tick on the 10-year T-note future is half of one 32nd, worth 15.625 dollars per contract.

Do bond CFDs expire?

They track futures that expire quarterly, in March, June, September and December. Some bond CFDs expire with the underlying contract; others roll automatically to the next one, with an adjustment so the price gap between contracts does not distort your open profit or loss.

What leverage applies to bond CFDs?

In the EU, retail CFD leverage is capped by asset class, and providers commonly apply a 5:1 limit to government bond CFDs, meaning 20% margin. UK rules differ in some details. Check the margin rate in your provider's instrument details.