Add TBT Calls
Play a Treasury Dip
“Capitalism without bankruptcy is like Christianity without hell.”
- Frank Borman, Former Chief Executive of Eastern Air Lines
PLAY: Buy the TBT March 45 Calls (TBT CS) at or under $2.55, good for the day. Place a protective stop limit at $1.35 and a pre-determined sniper sell at $4.00.
Dear Bottarelli Research Member,
In these extraordinary periods of corporate bailouts, I found the quote from above rather telling. In fact, I find it amazing that some of the most famous quotes about money, markets, and government are astonishingly relevant in today’s economic environment. But enough about that — let’s stay on topic and get positioned in a new play.
Specifically, I think it’s time to once again play a down-move in Treasuries via calls on the UltraShort 20+ Year Treasury ProShares (TBT – NYSE).As you can see from the TLT chart below, there’s strong resistance at the $105.00 level. This could spark another downside move on the TLT.
To play this fall, we’ll add TBT calls, which move at the rate of twice the inverse of the Lehman Brothers 20+ Year U.S Treasury index. As you can see from the TBT chart below, the $45.00 level has acted as powerful support many times in the recent past, and this appears to be no exception. Therefore, let’s add March TBT calls now!
PLAY: Buy the TBT March 45 Calls (TBT CS) at or under $2.55, good for the day. Place a protective stop limit at $1.35 and a pre-determined sniper sell at $4.00.
And as always…
Lock and load!
Sincerely,
© 2012 CSR Group, LLC. All rights reserved. Published in USA.
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