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 2^nd $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. 

About Michael Zerinskas

Originally from Chicago, Michael J. Zerinskas began his career as an intern for a small high-frequency trading firm based at the CME; he then moved on to become Chief Options Strategist at Benzinga.com. Michael is now Unusual Activity Editor at The Options Insider, specializing in VIX, volatility, and flagging unusual activity.