Bonds are bid and both the iShares Long-term Bond ETF (TLT) and the ProShares UltraShort Lehman 20+ Treasury ETF (TBT) are seeing increasing options action Monday. The benchmark ten-year is up 21/32nd and its yield has fallen to just 2.59 percent. Investors are turning to Treasury notes and bonds, as the economic data disappoints, equities falter, and the Fed sits ready on the sidelines to buy more bonds. In TLT, shares are up $2.21 to $104.50 today and options volume is 2.5X the average daily, with 24K calls and 21K puts traded. In TBT, which moves twice the inverse to TLT, shares are down $1.48 to $32.70 and options volume is 2X the average daily, with 44K calls and 18K puts traded. Overall sentiment seems mixed, but there seems to be at least a few traders looking for a correction in Treasurys and buying calls on the TBT. The fund is now 34 percent below levels seen in early April and, after today’s dip, has suffered a three-week 12.4 percent slide.
Category: All ETFs
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Frederic Ruffy is a well-known trader, writer, and strategist who has spent years educating investors and creating intelligent, insightful, unbiased market observations that are frequently cited by the Wall Street Journal and other financial publications. As senior analyst, Fred provides frequent and regular notes and daily updates for activity of interest.