We have mentioned repeatedly, the “come and go” presence of bearish speculators in the Long Term U.S. Treasury ETF space, for the greater part of about two years, where institutional options players will purchase calls in TBT (ProShares UltraShort 20+ Year Treasury Bond) and/or puts in TLT.
Other, similar strategies that have been utilized on the “short” side of Treasury Bond prices by asset managers that we have noted have included TMV (Direxion Daily 20 Year Plus Treasury Bear 3X) and SBND (PowerShares DB 3X Short 25+ Year Treasury Bond), which features a monthly re-balancing methodology, whereas TBT and TMV are daily leveraged products.
It is important to note that the “inverse” funds mentioned all incorporate leverage and are not meant for longer term, “buy and hold” positions due to reset of the leverage and the damage that can occur in choppy markets. That said, technical managers that want to swiftly embrace uni-directional trending markets, can likely use funds like these to capitalize on a continued Treasury sell-off (and environment of rising yields).
iShares Barclays 20+ Year Treasury Bond
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