Buyer Wants a Piece of the Action in Bonds – $TLT

By Sang Lucci Uncategorized

By Sang Lucci

Recent investor sentiment after the ‘surprising’ election of Donald Trump has centered around tax decreases and interest rate increases. This assumption by the masses has stimulated an aggressive sell-off in the bond markets with an estimated $1.9Tn in losses, according to Bank of America.

Shares of bank stocks along with insurance names have also rallied considerably; running congruent to this same theory.

As with any ‘panic’ sell we will see large money take bets that maybe the street has it wrong. After all, Trump could easily say Fed policy will remain the same I got other ‘ish to deal with like getting these Mexican gangs up outta here.

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Our boy, Wall St. Jesus, alerted us to a bull combo spread that hit the tape around 1:30 pm, betting that the move lower in the 20-yr treasury bond is over. The trader sold March $117 Puts and bought the $130 March Calls putting some serious cash up.

If you look at the upside calls this trader chose the strike that would retrace the gap from $130.

Full disclosure I am long a small amount of the December $125 Calls myself.

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About the Author

Sang Lucci

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Anand Sanghvi, aka "Lucci", is the founder and head trader at Sanglucci.com. Anand has successfully traded equities and options since 2006, beginning his career as a proprietary trader at PTG Capital. Anand was named head trader utilizing tape reading and options to make his plays. Anand left in 2009 to manage his own money and infamously turned $50,000 into over $2,400,000. He soon founded Sanglucci.com.

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