Monday, August 30, 2010

Long interest rates for September via TBT

Again I am keeping my positions very small but managable. After the rally in equities that happened on Friday we saw a huge selloff on the TLT. Today the markets are giving back some of those gains and we are getting a pop in the TBT which is a double inverse of TLT.

This morning I sold 1 Sep '10 $30 put at $0.72, which at initiation TOS is showing a 38% chance of expiring ITM. The breakeven on this is 29.28 with the lows put in last week at 29.77, I will re-evaluate if these lows are broken.


  1. We are getting a pretty nice pop in the market so I decided that booking 32% of the available profit in 2 days was worth taking the trade off.

  2. I agree completely with taking 32% of max possible in two days in exchange for 0% further risk. Doesn't matter what your outlook is, what trade you have on, etc. Just taking gifts when the market gives them to you is how I look at that. I actually sold cash secured puts on TBT at the 27 strike yesterday but its such a small position that I'm going to leave it on. I don't mine owning at that price because I feel bonds aren't going to continue their move to new highs in the next two weeks until these expire.