T Bond has gone parabolic

Discussion in 'Trading' started by ralph00, Dec 17, 2008.

  1. Crash is coming - this week, next month, next year ... I don't know. I'd like to get traders thoughts on the best way to play it.

    My guess would be to purchase deep out-of-the-money puts on the CBOT.

    Another option would be deep out-of-the-money interest rate calls on the CBOE.

    Yet another option would be calls on TBT.

    It seems like all of those option markets are pretty thin though.
  2. The fed just said they are going to buy buy buy. Let the thing settle and wait until Fannie Mae spreads come in.. It may not move much more, but there's no reason for it to fall. It only makes sense that the Fannie Mae mortgages move much higher. I think you'll have a great shorting opportunity come February. (that said I have a small long term TBT position entered at 52.80. I'll double down at 30.00)

    If you want, send me a small fraction of the money you save in losses by doing this and we'll both be thrilled.
  3. Could be a year or 2 before this thing comes back.
  4. With that said maybe I'll double down on TBT at 10.00. If I learned anything from trying to short crude or housing stocks, it is... wait, especially when the federal reserve is the possible buyer.
  5. I don't know - things move very quickly these days. A lot of folks thought oil was bubbly at $145. I don't think even the most bearish among them thought oil would be $40 within just a few months.

    Try to imagine a world in June of 09 with the 30 year at 6%. What's the most attractive risk/reward option out there?
  6. Forget about the oil comparison. IF the economy remains shitty, and all signs indicate that it will for some time, these bond levels will remain.
  7. >>wait until Fannie Mae spreads come in.. >>
    do you mean 'wait'... 'tighter'?
  8. silk


    deflation has gone parabolic also. My gas station lowers the price sometimes twice in the same day.
  9. Better the money goes into Treasuries then Commodities.
  10. Fannie Mae spreads tighter...

    #10     Dec 17, 2008