Add TBT Calls
Play a Treasury Sell-Off
PLAY: Buy the TBT March 45 Calls (TBT CS) at or under $3.10, good for the day. Place a protective stop limit at $1.70 and a pre-determined sniper sell at $4.50.
Dear Bottarelli Research Member,
One of the most successful and consistent trades we’ve made here in 2009 is playing the 3-4 day movements of U.S. Treasuries via iShares Barclays 20+ Year Treasury Bonds (TLT – NYSE). As you can see below, the TLT has recently moved sharply higher, but now that strength is starting to give out. This could indicate that a fresh round of downside selling pressure is on the horizon.
In my view, the best way to play this down-move in Treasuries is using the UltraShort 20+ Year Treasury ProShares (TBT – NYSE), which moves at the rate of twice the inverse of the Treasury markets. In contrast to the TLT chart above, the TBT chart has moved down recently, and just might be ready for another upside pop. Therefore, let’s play this upside move using TBT March 45 calls.
PLAY: Buy the TBT March 45 Calls (TBT CS) at or under $3.10, good for the day. Place a protective stop limit at $1.70 and a pre-determined sniper sell at $4.50.
And as always…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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