Monday, June 25, 2012

Sell TLT strangles

Sell TLT strangles TLT@126.7
Sell Aug 115 puts and Aug 138 calls
/edited for typo, Aug 138 calls sold

TLT is the 20 year U.S. Treasury ETF. Selling strangles is a bet on a trading range. There is a good base of support at 115, mild resistance at the recent highs of 130. Operation twist is still distorting the U.S. bond market.

Elsewhere, gold stabilized after I exited, but I had little way of knowing that. Today, I look at selling put backratios on SPY, but August premiums seem modest given the recent market volatility.

Net neutral IWM, SPY, TLT

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