• 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 6, 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 $174-$177 in-the-money vertical Bear Put spread at $2.98 or best

Closing Trade

5-6-2020

expiration date: May 15, 2020

Portfolio weighting: 10%

Number of Contracts = 38 contracts

Since April 17, I have initiated seven consecutive bond trades, all of which have become immediately profitable. As a result, we have added 11.07% to our 2020 performance.

It is one of the most aggressive postures in the market I have ever taken, but then, this is one of the cleanest trades I have ever seen.

The fundamentals of this trade are very simple. With the national debt already rising from a record $24.3 trillion to an eye-popping $32 trillion by the end of 2020, the US Treasury demands on the bond market are going to be incredible. Debt to GDP now stands at 113% but will rocket to 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.

And right in the middle of the Treasury’s attempt to raise a blockbuster $3 trillion in new debt in Q2, the president threatens a default. It is short-sellers' dream come true.

I am therefore selling the iShares Barclays 20+ Year Treasury Bond Fund (TLT) May 2020 $174-$177 in-the-money vertical Bear Put spread at $2.98 or best. This gives a triple weighting in our net short in the bond market.

By coming out here, you get to earn $1,444 or 14.61% in 5 trading days. You will be harvesting 87.5% of the maximum potential profit. The risk/reward of continuing is no longer favorable.

If you have the ProShares Ultra Short 20 Year Plus Treasury Bond ETF (TBT) outright, keep it for greater price gains.

This was a bet that the (TLT) will not rise above $174.00 by the May 15 option expiration in 10 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 38 May 2020 (TLT) $177 puts at……...............…….………$14.00

Buy to cover short 38 May 2020 (TLT) $174 puts at……..……$11.02

Net Proceeds:………………...........………….………..………….….....$2.98

Profit: $2.98 - $2.60 = $0.38

(38 X 100 X $0.38) = $1,444 or 14.61% in 5 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 Trader2020-05-06 09:58:192020-05-06 09:58:19Trade Alert - (TLT) May 6, 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: May 6, 2020 - MDT Pro Tips A.M. Link to: May 6, 2020 - MDT Pro Tips A.M. May 6, 2020 - MDT Pro Tips A.M. Link to: Trade Alert - (TLT) May 6, 2020 - SELL-TAKE PROFITS Link to: Trade Alert - (TLT) May 6, 2020 - SELL-TAKE PROFITS Trade Alert - (TLT) May 6, 2020 - SELL-TAKE PROFITS
Scroll to top