What are Spoos and Blues?

The phrase “Spoos and Blues” refers to a strategy that pairs U.S. equity futures with Treasury bond futures. “Spoos” is trader slang for S&P 500 futures, which originally traded on the Chicago Mercantile Exchange under the ticker SP. “Blues” refers to the 30-year U.S. Treasury bond futures contract, which has long been a benchmark for interest rate markets.

For awhile it was "Spoos and 2s" which means long equities and long 2-year bonds on a bet that the Fed would keep rates ultra-low and that 2-year bonds would represent a good hedge. Then it was "Spoos and Blues" which represented a long Eurodollar bet, which was again a bet against Fed easing.

The idea behind the trade is straightforward: equities and long-dated government bonds often move in opposite directions. When stocks rally, bond prices can weaken as investors shift money toward risk assets. When markets turn risk-off, bonds tend to attract demand while equities fall. By trading Spoos against Blues, professional traders and hedge funds can express a view on the relationship between growth and interest rates, or hedge exposure in one market with an offsetting position in the other.

The popularity of this phrase comes from the way it captures two of the most liquid and widely watched futures contracts in the world. Together, they provide a simple way to measure sentiment across both the equity and fixed-income markets.