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Bobl, bund and schatz

Bobl

Bobl is an acronym for bundesobligationen – debt issued by the German government. The acronym crops up in a futures contract used to trade medium-term German debt. The contract has a notional value of €100,000.

On the Eurex exchange euro-bobl futures contracts exist for the months of March, June, September and December. The underlying deliverable product for this contract is German debt securities with remaining term of 4.5 to 5.5 years with a 6% coupon.

Bund

euro-bund futures contracts work in the same way as euro-bobl futures contracts except that the underlying deliverable product is German debt securities with a remaining term of 8.5 to 10.5 years and a coupon of 6%.

Schatz

schatz-bund futures are the short-dated equivalent of the bobl and bund futures. Here the underlying deliverable product is German debt securities with a remaining term of 1.75 to 2.25 years and a coupon of 6%.

Germany hasn’t issued debt with a coupon as high as 6% for some time and so the contract values are adjusted to reflect the market price of a bond with a 6% coupon.

 

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