Treasuries to Find a Short Term Bottom
I am detecting some large action in the ProShares Ultra Short 20+ Year Treasury ETF (NYSE: TBT) this morning. This ETF tracks twice the inverse of 20 year treasury prices; long story short, if you want to make money betting that treasury yields will rise and prices will fall, you would buy this ETF. This gives you a very levered bet very easily. But if you really wanted to juice the returns, you would look to the options on this ETF.
The action I am seeing is coming on the March $46 pt line, where 19,652 contracts were purchased on the offer for $0.04. The volume is below open interest, indicating a position has been closed, but what we can derive from this is that the trader believes that the likelihood of the TBT rising further is less than the likelihood that it will fall.
The ProShares Ultra Short 20+ Year Treasury is at a resistance level on the chart, as well as a downward trend line, which echoes the same theme as this trade.
