Are Bonds About to Push Higher? (TLT)
Shares of the iShares Barclays 20+ Year treasury Bond Fund (TLT) are trading higher on the session by 0.38%, at $123.10. The ETF has been forming a wedge pattern for the better part of five months now; it is hinting at a break to the topside today.
One trader is buying short-term upside on the TLT today. A short while ago the November 2nd $125/126 weekly call spread was purchased 7,500 times, for $0.08. Given current open interest of 487 and 192 contracts, respectively, this is clearly new positioning.
This is a nominally cheap bet that bonds will break out to the upside in the new few days with a potential max gain of 1,150% if the TLT can rally to $126 (+2.32%).
30-day implied volatility is flat on the session at 16.16%; 10-day realized vol is registering 17.35%.
The iShares Barclays 20+ Year treasury Bond Fund seeks investment results that correspond generally to the price and yield performance before fees and expenses of the Barclays US 20 Year Treasury Bond Index.
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