Skip to main content

Market Overview

Mike Khouw's TIP Trade

Mike Khouw's TIP Trade

On CNBC's "Options Action," Mike Khouw suggested a bullish options trade on iShares Barclays TIPS Bond Fund (NYSE: TIP). He said we're in a low interest rate environment and it seems to him that interest rates can even go lower.

He noticed that the institutional investors are betting on the steepening of the curve, which means that they are selling the longer-dated treasuries and they're betting on the short term interest rates to fall. The reason for such behavior is inflation, explained Khouw. It's the real interest rates that he's concerned about so he wants to make a bullish bet on TIP.

Khouw wants to buy the September $125 calls for $1.15. The trade breaks even at $126.15 or around 1.5% above the closing price on Friday.


Related Articles (TIP)

View Comments and Join the Discussion!

Posted-In: CNBC Mike Khouw Options ActionOptions Markets Media

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at