Oversold Trade in TLT

[Steven Place]

TLT is down 6% in the past 10 days. That’s statistically oversold– it doesn’t mean that bonds rip higher from here, just that the odds of continuation at this pace are pretty low.

Here’s the trade:

Sell to open TLT Jun 117/114 bull put spread @0.50 HALF SIZE

ADD to the trade at 0.75

CLOSE the trade at 0.10

[Steven Place]

Going to close here.

I never did add the second round of spreads because I didn’t feel comfortable with this trade. This was most likely a function of being too early, and if I’d received a higher credit it wouldn’t have been a problem.

I’ve done this a few times before with TLT where I’m too early and not getting enough credit, so if I play “buy the dip” again in treasuries, I need to have more patience with my entries.

Buy to close TLT Jun 117/114 bull put spread @0.17

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