• support@madhedgefundtrader.com
  • Member Login
Mad Hedge Fund Trader
  • Home
  • About
  • Store
  • Luncheons
  • Testimonials
  • Contact Us
  • Click to open the search input field Click to open the search input field Search
  • Menu Menu

Trade Alert - (TLT) May 4, 2020 - SELL-TAKE PROFITS

Trade Alert

When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.


Alert

 

Trade Alert - (TLT) – TAKE PROFITS

SELL the iShares Barclays 20+ Year Treasury Bond Fund (TLT) May 2020 $176-$179 in-the-money vertical Bear Put spread at $2.95 or best

Closing Trade

5-4-2020

expiration date: May 15, 2020

Portfolio weighting: 10%

Number of Contracts = 40 contracts

I am going to use the one-point dive in bond prices this morning to cut back my huge short position there. In a mere nine trading days, we have managed to collapse of nice four-point collapse in bond prices.

By coming out here, you get to earn 90% of the maximum potential profit. The risk/reward of continuing is no longer favorable. Ringing the cash register, you get to earn $1,800 or 18% in 9 trading days.

The fundamentals of this trade are very simple. With the national debt already rising from a record $23 trillion to an eye-popping $32 trillion by the end of 2010, the US Treasury demands on the bond market are going to be incredible. Debt to GDP now stands at 113% but will rocket by 147% by next year.

It is almost mathematically impossible for bond prices to rise. They can only go sideways at best, or down big in the worst case. Sounds like a great short to me. This could be the start of the greatest short play in history.

I am therefore selling the iShares Barclays 20+ Year Treasury Bond Fund (TLT) May 2020 $176-$179 in-the-money vertical Bear Put spread at $2.95 or best. This cuts our net short in the bond market from 40% back down to 30%.

If you can’t get done at this price today, then keep re-entering it every day until you are. Alternatively, you can capture the full $3.00 value by running it into the May 15 option expiration in nine trading days.

If you bought the ProShares Ultra Short 20 Year Plus Treasury Bond ETF (TBT), keep it for more declines in bond prices.

This was a bet that the (TLT) will not rise above $176.00 by the May 15 option expiration in 18 trading days. To lose money on this position ten-year US Treasury yields would have to approach near 0.30%.

Here are the specific trades you need to exit this position:

Sell 40 May 2020 (TLT) $179 puts at………….…............……$12.00

Buy to cover short 40 May 2020 (TLT) $176 puts at…………$9.05

Net Proceeds:………………………….…........……..………….….....$2.95

Profit: $2.95 - $2.50 = $0.45

(40 X 100 X $0.45) = $1,800 or 18% in 9 trading days.

 

 

 

To see how to enter this trade in your online platform, please look at the order ticket below, which I pulled off of Interactive Brokers.

If you are uncertain on how to execute an options spread, please watch my training video on “How to Execute a Vertical Bear Put Spread” by clicking here.
 
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep in-the-money spread trades can be enormous.

Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.

Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.

Share this entry
  • Share on Facebook
  • Share on X
  • Share on WhatsApp
  • Share on Pinterest
  • Share on LinkedIn
  • Share by Mail
https://www.madhedgefundtrader.com/wp-content/uploads/2016/02/Alert-e1457452190575.jpg 135 150 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2020-05-04 10:40:492020-05-04 10:40:49Trade Alert - (TLT) May 4, 2020 - SELL-TAKE PROFITS

tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Mad Hedge Fund Trader (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade. 

Legal Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future returns. MadHedgeFundTrader.com and all individuals affiliated with this site assume no responsibilities for your trading and investment results. The indicators, strategies, columns, articles and all other features are for educational purposes only and should not be construed as investment advice. Information for futures trading observations are obtained from sources believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any results from the use of the information. Your use of the trading observations is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness of the information. You must assess the risk of any trade with your broker and make your own independent decisions regarding any securities mentioned herein. Affiliates of MadHedgeFundTrader.com may have a position or effect transactions in the securities described herein (or options thereon) and/or otherwise employ trading strategies that may be consistent or inconsistent with the provided strategies.

Copyright © 2025. Mad Hedge Fund Trader. All Rights Reserved. support@madhedgefundtrader.com
  • Privacy Policy
  • Disclaimer
  • FAQ
Link to: Trade Alert - (SPY) May 4, 2020 - SELL-TAKE PROFITS Link to: Trade Alert - (SPY) May 4, 2020 - SELL-TAKE PROFITS Trade Alert - (SPY) May 4, 2020 - SELL-TAKE PROFITS Link to: May 4, 2020 - MDT Alert (CLVS) Link to: May 4, 2020 - MDT Alert (CLVS) May 4, 2020 - MDT Alert (CLVS)
Scroll to top