TheOptionPlayer.com sets up a Treasury Bond ETF (NasdaqGM: TLT) short-term (37-day) option strategy (based on Wednesday’s closing quoted bid/ask prices)
Investors could simultaneously:
The difference between funds received and paid out is an approx. 15% profit keep if the Treasury Bond ETF closes above $122 on Friday November 17th, but immediately execute a trade adjustment if it appears the price will end lower. If the price gaps lower at the start of trading we might revise the strike prices. See Guidelines page at www.theoptionplayer.com/ for explanation on how trade is set up.
Why we recommend it:
As evidenced in the chart below, the Treasury Bond ETF (NasdaqGM: TLT) plummeted as the dollar picked up strength recently and market pundits speculated the Fed would raise rates. Also the GOP tax reform plan added to the pressure on the bond market. But after gaining for four consecutive trading weeks, the dollar weakened this week. Already you can see in the chart how the TLT ETF is starting a recovery bounce off a support level. Momentum is turning bullish from an oversold level where the Treasury Bond ETF normally moves higher. Any Fed rate increase won’t probably happen until December, plus a short squeeze might support a recovery bounce. The Treasury Bond ETF has not closed below our target since early July and the probability is the TLT ETF won’t be below the short put at the November option expiration date.
52-Week High: $133.93
52-Week Low: $116.49
Regular www.theoptionplayer.com subscribers can attest to the preponderance of successful trades published on this website.
The information presented here is for educational and informational purposes only, and this document is not to be construed as an offer to sell, or the solicitation of an offer to buy, securities. Some investments are not suitable for all investors, and there can be no assurance that any investment strategy will be successful.