TBT long play

Quote from syswizard:
No, just following the market, which as we all know, is pretty random.
What I like about the TBT long play is that it implicitly has a bottom as interest rates fall to near zero.
When equities go into a "risk on" scenario, this guy is likely to rise.
The issue is when.
There is a decent amount of option volume for near-the-money options....and the spread is only nickle.
More...
Well, that "zero bottom" isn't quite the right way of thinking about it, since your carry and rolldown are negative (not sure how it works for TBT, but that's what happens w/short bond positions). And if the mkt is random, what's the point of trying to time it and pick bottoms?
 
Quote from Martinghoul:

Well, that "zero bottom" isn't quite the right way of thinking about it, since your carry and rolldown are negative (not sure how it works for TBT, but that's what happens w/short bond positions). And if the mkt is random, what's the point of trying to time it and pick bottoms?
More...
TBT being a leveraged ETF is likely has a decent sized position in short bond futures - 10 year. But there is an implied ceiling once rates get near zero, right ? In shorting stocks, there is no ceiling.
 
Quote from Martinghoul:

Nah, I think it's more of a "BAC below $5" effect...
More...
You're right....thanks for that.
When oh when will we see the bottom in the bank stocks ?
 
Quote from syswizard:

TBT being a leveraged ETF is likely has a decent sized position in short bond futures - 10 year. But there is an implied ceiling once rates get near zero, right ? In shorting stocks, there is no ceiling.
More...

The 10 yr is a "note," bonds is referring to the the 30 yr future contract.

5 yr
 
I can't believe I started this thread back in July with TBT in the 30's !
Support at 19 looks strong.
The Fed "put" seems to support a long position. TBT was at 21 just 10 days ago.
 
Well...now some expert (Marion Bartels ?) on Bloomberg indicates a 1.5 percent rate in the ten year is imminent. WOWZER !!! It's all about Europe.
That would put TBT UNDER 17 !!!

Is this getting crazy or what ?
 
One thing that doesn't make sense to me is TLT being so high and the stock market also being at the multi-year highs ~ those 2 things don't go together.

I guess it's money from Europe buying up treasuries cause they're all afraid for the Euro...

If the Europe problems start to straighten out I'd expect TBT to rise as Europe pulls it's money back into Euro bonds ...

But I've been very wrong on TBT for awhile ... I've been considering some new LEAP call spreads for Jan 13/14 -
 
You must log in or register to reply here.
Back
Top