Morning Commentary Tuesday March 9, 2010

Perhaps a pause in the upswing as the futures are off slightly and the Europeon markets have pulled back over night. Don’t be complacent though, this could just be the rally reloading its guns. Though a meaningful decline is expected by many.

The recent margin rule changes have brought back the double diagonal as a possible consideration in the income traders arsenal. Timing wise we are in range for April double diagonals now. With the current volatility trends this may be a wise strategy as you can adjust your vega by how you set up your structure on the doub diag. It seems to me that flat to slightly long vega with your doub diag would be your safest bet for now. Try one this month on paper to get back into the swing of trading them and put this tool back in your trading toolbox.