“Speaking generally, one of the characteristics of these moves is that they are more prone to continue than to reverse,” the firm said in a strategy note Tuesday. “A typical trading pattern might be a sharp breakdown (end of last week), followed by a period of consolidation (possibly underway), which would then be followed by another sharp selloff. Note that Treasurys are also set up for a more extended sell-off.”
In options markets, call buyers have resurfaced this week in ProShares UltraShort 20+ Year Treasury (TBT). These traders are “continuing to play higher yields and thus lower prices in Treasuries,” said Street One Financial. [ETF Chart of the Day: U.S. Treasury Bonds]
Marc Prosser at Forbes notes that inverse Treasury ETFs have relatively higher expense ratios.
ProShares UltraShort 20+ Year Treasury
