TREASURY BOND OPTION STRATEGY

Peter Ori General Commentary Leave a Comment

TREASURY YIELDS SHOULD MOVE HIGHER AFTER THE TRADE DEAL WITH CHINA WAS COMPLETED, IN MY OPINION. LOOKING AT A LOW COST LOW RISK TRADE ENTRY POINT IN THE MARCH 30 YEAR TREASURY BOND LAST AT 158.04, THE YIELD IS NOW 2.26.

THE 157.5/157/156.5 PUT FLY COST 3 64THS OR  $46.875 TO ENTER plus commissions and fees.. TAKE PROFIT LEVELS ARE BETWEEN 14 64THS = $218.75 TO 16 64THS =$250.40.

THE EXPIRATION IS 1/31/2020 THE CONTRACT IS THE WEEK-5 WITH THE UNDERLYING FUTURES CONTRACT THE MARCH 30YR

My rational for a potential downside move in Bond futures comes on two fronts. From a technical perspectiveTREASURY PRICES have been in a down trend since the start of the 4th quarter. I look for that to continue in the near term. SHOULD that continue I look for a MOVE LOWER TOWARD 157.00 FROM HERE WITH YIELDS MOVING HIGHER TOWARD 2.33.

Fundamentally, I see ECONOMIC FACTORS amid BETTER ECONOMIC DATA coupled WITH THE TRADE AGREEMENTS IN PLACE That will keep the  EQUITY MARKETS firm with a risk on environment in place into month end.

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