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Dan Nathan's iShares Barclays 20+ Yr Treasury ETF Trade

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Dan Nathan spoke on CNBC's Options Action about the future direction of the price of iShares Barclays 20+ Yr Treas.Bond (ETF) (NYSE: TLT).

He explained that with the ECB meeting this week, an FOMC meeting on January 28, and a Fed meeting in March, the iShares Barclays 20+ Yr Treas.Bond (ETF) could move lower.

Nathan said he thinks that if the strength in jobs data continues, and if any hint of wage inflation appears over the next couple of months, the market is going to start to price in higher interest rates.

Nathan wants to buy the March 130 put for $2.30 and sell the March 120 put for $0.30.

This trade would cost him $2, which is his maximal loss; he can make $8 on this trade if iShares Barclays 20+ Yr Treas.Bond (ETF) drops to $120 at March expiration. The trade starts to make money below $128.

Posted-In: Dan Nathan Options ActionCNBC Options Markets Media


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