Options traders continue to position for higher yields and lower bond prices with ETFs that follow U.S. Treasuries.
Treasury bears have surfaced again this week to snap up calls in ProShares UltraShort 20+ Year Treasury Bond (NYSEArca: TBT), says Paul Weisbruch, head of ETF/options sales and trading at Street One Financial. [The Contrarian: Treasury ETFs]
“Likewise, good sized put buyers were also present in iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT), and these trades have been enacted continually in the options markets for months, with bearish speculators on the long bond appearing rather frequently especially in the past two weeks,” Weisbruch wrote in a strategy note. [Finally Time to Short Treasuries with ETFs?]
TLT fell sharply earlier this month but has rebounded somewhat at the 200-day simple moving average. [ETF Chart of the Day: Treasury Bonds]
Elsewhere in options markets, traders are using ETFs to position for lower volatility in the stock market, and also higher gold prices.