golddolphin
Long

TLT Inverse Bond Play Before Meeting

NASDAQ:TLT   Ishares 20+ Year Treasury Bond ETF
The play for OTM calls on TLT right now is a good risk to reward for myself given the numerous positive potential outcomes. If they don't cut rates, I expect TLT to make a very nice upward move due to bond prices going up and maturity going down.

If they cut rates, I still expect bond maturities to go down and for TLT to go up.

With the current landscape I am feeling very comfortable with the prices I got for my OTM calls and the ROI .

I'll update later today after the meeting which is less than two hours away currently.


Happy trading everyone, try and be as positive of an impact as you can be everyday. Good luck with any of your plays today

-golddolphin
Oct 30
Comment: For those asking me when and why I closed, I closed around $9.44 I still like this stock going forward but expect some pullback. With the uncertainty this week has in store for the market, FTCH is up roughly 15-20% from my entry a few days ago which is more than enough for me.
Oct 30
Comment: Ignore the previous comment was from my other play. TLT made some moves this afternoon after the meeting, holding my OTM calls.
After today, what do you think about TLT puts since TLT was in descending channel before all this?
Reply
BrokeCollegeStudent tvillagomez1969
@tvillagomez1969, hey I'm the author for this play just not near my computer right now so I'll answer from this account. I don't see your logic with using channels to warrant a short. I'm all about the TA but this is an inverse bond etf. Do you know what that is?

Technical analysis doesn't really follow TLT since it is actually based on society and fundamentals around inflation, the fed, bond maturities rates and more. We just had a fed announce they lowered interest rates. So bond maturity rates are going down and the inverse of that is going....up.

You are asking right now if you should long the bond market when they just lowered interest rates which is sort of the opposite. Market timing is everything but these are my 2cents.

The fed said they wouldn't even consider raising interest rates until they had a large amount of evidence to support current and future inflation rates. So going long on bonds is a bad move here.

Lastly, if the stock market starts to drop and money goes into bonds, the price of the bonds go up BUT the maturity rates go down which is very good for TLT.

Thanks for your comment, always available to give my opinion.
Reply
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