just read an article that demand for TLT calls has reached a record... is this the trade? long calls on TLT? is this the trade to bet the farm on?
Buy OTM puts, grab as many 10yr T-Note futures as you can
- Thread starter Nighthawk
- Start date
The moves in financial markets today are incredible, especially when you consider that CPI was only 0.1 percentage points below expectations (and even less unrounded).
It speaks to the positioning of market participants and the mountains of cash on the sidelines. Bonds are hugely bid today with US 5-year yields down 23 basis points to 4.42%. The S&P 500 is up 2.1% and the Russell 2000 up nearly 5%.
The FX market hasn't sat this one out at all, with the dollar sinking hard and finding new lows at the moment. Big gainers include the antipodeans, euro and pound.
Cable is up 219 pips to the best levels since mid-September.
I said I want to come back in March 2024- and not mid December 2023!
Please note: core inflation was just reported Tuesday at a sloppy 4%. And uncle Powell has AGAIN mis-communicated FED´s intentions. Is Bill Ackmann paying him under the table "advisory fees"? Anyway, taking 50% of positions off the table. US 10yr yields currently at 4,012%. Geez.
Up it goes to the moon and beyond.
Buy ---> Sell OTM puts,
grab ---> dispose
as many 10yr T-Note futures as you can
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if anyone followed me into this trade, the sep 2024 tlt calls are up over 100%
just getting started?1US 10yr yields at 3,882%. US 10yr futures at 112.225. Selling another 25% of open positions. Yields coming down 120 basis points from 5.02 in 8 weeks. CRAZY! Seems, CTA bots are working overtime to get their fair share of Sharpe >7. Leverage to the hilt, closing their eyes and pray for uncle Powell to say the right words.
I am still expecting that yields will rush back above 4% in the near future.
Are you aware that S&P 500, Nasdaq and DJ have created in only 8 weeks another 1.2 Trillion in "shareholder value"? Lots of monies to be spent for XMas.
And on top, gasoline prices below $3.00 per gallon.
Yada yada yada. Purchasing power de luxe....
Fed's Waller: Data in the last few months allowing Fed to consider cutting rates this year
The event was moved to virtual-only due to snow in Washington.
Buying some US 10yr T Note Futures with spot yields at 4,09%. Ready to buy more at higher yields IF we reach 4,22%. Otherwise hedging OTM T Note Futures calls March strikes.
- Comments from Fed Governor Christopher Waller in a virtual event from Brookings
The event was moved to virtual-only due to snow in Washington.
- Changes in policy path must be 'carefully calibrated' and 'not rushed'
- I am more confident that we are within striking distance of achieving sustainable 2% inflation
- We are close but I will need more info in coming months to be sure
- I view risks to Fed's mandates as more closely balanced
- Fed will be able to cut rates this year as long as inflation doesn't rebound or stay high
- This view is consistent with Fed projections for three 25 bps cuts in 2024
- Timing and actual number of cuts will depend on data
- Economic activity has moderated
- Setting of policy needs to proceed with more caution to avoid over-tightening
- Financial conditions remain restrictive
- Highlights signs that the labor market continues to come into better balance
- Data on job openings indicates ongoing moderation in labor demand
Buying some US 10yr T Note Futures with spot yields at 4,09%. Ready to buy more at higher yields IF we reach 4,22%. Otherwise hedging OTM T Note Futures calls March strikes.
i won't buy anything until the 10y rate is above 4.5
We are in May 2024, how did this trade work out?