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Todd Gordon's 20-Year Treasury Bond Trade

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Todd Gordon spoke on CNBC's Trading Nation about a bullish options strategy in iShares Barclays 20+ Yr Treas.Bond (ETF) (NASDAQ: 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.

Posted-In: CNBC Todd Gordon Trading NationOptions Markets Media ETFs

 

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