20+ TREASURY BOND: The 20+ TBond Commandments (+26%)

Cold Feet Feel Colder On Weekends.

Jul 08, 2022

∙ Paid

Trade exit to avoid a potential change in trend.
We consider a return on capital of 26% fair and move on to the next situation.

1. Recap Situation

TLT ranked considerably high on both implied volatility measures. In principle, perfect conditions to sell premium, and negative beta serves most portfolios well.

Check out the original BrainDoζer thesis below.

MacroDoζer

TLT: The 20+ TBond Commandments

Executive Summary TLT ranks on top of IV Rank and IV Percentile lists. Selling premium at the top usually pays off. TLT with negative beta may serve portfolios well. Selling a slightly bearish risk-defined straddle results in a 6.20 Credit. 1. Why Do I Care Right Now…

2 years ago · MacroDoζer

2. Why Now?

TLT can act erratically in unusual circumstances. In absolute terms, it is a low-volatility asset, but when interest rates hit the fan, it can swing back and forth viciously and start trending without looking back. We wanted to be fancy and play TLT, but considering the macro environment, we feel the start of a potential upwards trend could kick off soon.

TLT has been trading at and above our break-even point for quite some time and finally retraced back to the 61.8% Fibonacci retracement level measured from its recent lows and highs. There are only 21 days left to contract maturity, and while we are getting …

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