If you wanted to short the 30 year bond, would you get long TBT, or short TLT? I don't think I want to play this through futures, and I don't want to through options. Any suggestions as to an efficient way to take a position in this for a couple months?
Why not futures or options on futures? A better pure play and better tax benefits if you are in the USA.
I thought about it, but I don't want the full leverage of even 1 contract. I think for my size account and my risk tolerance I would rather smaller size than 1 full contract. I think I could stomach a half a contract. I guess my only options are TLT or TBT, but that is why I am asking I guess.
Long TBT or short TLT would both work. Probably get more "shares" using TBT because market is so high now with TLT, therefore TBT should be much lower in price. I don't think TBT has much of a tracking error...check to make sure. FWIW I trade the 30 YR. futures daily. GOOD LUCK!
You can also sell a very deep in the money put. For example, at this moment, I see that the September 2016 155 contract is $15.80, so the time value in this put is only about $0.64. You can reap the benefits of 100 short shares of TLT with a small expenditure, no margin, and limited risk.
i have never heard of a leveraged etf that is not subject to tracking error. why should this one be an exception?