I think the play is buy deep in the money, Puts.
Shorting Bonds - Question
- Thread starter Palindrome
- Start date
GO FOR IT! Just have a plan if things go against you.
I'm not doing it yet, it has more room to run on the upside... The time is not right yet.
http://stockcharts.com/h-sc/ui
This is a short bond/long bond spread position. Supposed to be same duration in both
tripple etf's. i would not expect quite a drift as there is ober the last couple years.
Why is that?
This is a short bond/long bond spread position. Supposed to be same duration in both
tripple etf's. i would not expect quite a drift as there is ober the last couple years.
Why is that?
Don't run the DITM puts long-term; the bid-ask is bad on longer-dated contracts. Usually one is best off just using consecutive monthly contracts.
I'm glad you said it's not time yet; I don't think so, either. But the time will come, and it will be very nice.
Every leveraged ETF I've tested has almost zero tracking error when you account for the management fee. If you read the prospectus you'll find that they promise to match 2X, 3X, or -1X of the daily return of their underlying index. Which they all do almost exactly with no tracking error. If you expect it to return the 2X/3X/-1X of the underlying over a period of more than one day you'll most likely be disappointed, but that's not tracking error, it's user error on the part of the person who didn't read or understand the prospectus.
Can consider this, Debit Put spreads on the Futures, and if the T-Bonds going your way, buy back the short Put. But there is time decay. I trade Commodities sometimes each day or every couple of weeks, if you have the funds Short the T-Bonds then do a Debit Call spread for hedge. If the T-Bonds start going down, exit long Call and keep short Call for awhile.