Todd Gordon spoke on CNBC's Trading Nation about a bullish options strategy in iShares Barclays 20+ Yr Treas.Bond (ETF) TLT. He thinks that the ETF could trade higher and he wants to use options to make a bullish bet.
He noticed that implied volatility in the name has increased as the bond market sold off. It is currently trading at the top of the range. He wants to use the opportunity to sell expensive options.
Specifically, Gordon wants to sell the November 122 put and buy the November 120 put for a credit of $0.64. If iShares Barclays 20+ Yr Treas.Bond (ETF) stays above $122 at the November expiration, he is going to collect the premium. Below $121.36, the trade starts to lose money and it can maximally lose $1.36.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
