TBT August 24's definitely will be rocking to tomorrow....wow, the premiums are incredible. I can't believe TBT was at 30+ just 2 weeks ago !!
TBT (24.15 close) Aug 24 calls are 0.43/0.47 Sep 24 calls are 1.55/1.58 You meant a great trade in buying Aug 24 or buy sep 24 and sell Aug 24. ( If TBT rallies even with a cusion of 30 cents ,sometimes we will have a loss as Sep 24 will not rally as much as Aug 24) Buy write is ok. If TBT closes below 24 can sell Sep 24 again. May be DEC 24-30 {2.52/2.56--.78/0.81} bull call spread looks interesting.(1x1 not 2)
Yes, bull spread makes sense here for Sept. Looks like all of the action was/is in the 25 Aug puts.... 32,000 contracts open interest !! BTW: why not 1:2 ? Chances of going above 30 look so minimal right now.
I was obviously "early" with this one. Whew....now they're talking the 10 year note going to 1.5% !!! As usual with the markets: "it will end when it ends". (the decline in interest dates) At some point in time, maybe early 2012, staying short the TBT ITM puts will be a great money maker.
A better question for you... Is this the bottom for French banks? Answer that and I'll give you an idea on your question.
My take: NO. I think the nadir is coming up in October/November. After that, I'd be hugely long US equities and short treasuries via long TBT bets.
Well, at least I was right about that October go long call.....TBT just at 52 week lows....AGAIN. Each new crisis brings it down....as money flows from equities into bonds.
Thinking of adding some Jan or March calls. Tuck it away and see what happens. Since markets look ahead - by then this thing could be up 50%+ plus Contrarian play? What strike? Does a strangle make sense down here? Straddle?