The government bond contract constitute a valuable tool in managing Swedish long-term interest rate risk. The contract base is a synthetic 2-, 5- or 10- year Swedish government bond. The contract has standardized expiration days, i.e. IMM days. This means that liquidity is concentrated to a limited number of contracts, which benefits trading.
The contract is suitable both for directional trading as well as for spread trading, e.g. government yield curve spreads like 6-month government risk against 2-year government risk or spreads against mortgage bond futures. A combination of cash bonds and futures can also be used for creating short-term investments or financing. For the complete description of the contract specification please see Nasdaq Stockholm Rules and Regulations.
The government bond forwards (R-contracts) were replaced by government bond futures (SGB-contracts) during 2016.
Download product sheet Swedish Government bond future
Read more about Treasury Bonds.