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Puts on long dated US Treasury Bonds


twacowfca
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What's the best way to buy a put on long dated, 20 to 30 year, US Treasury Bonds?  The put would be for more than a month, ideally for a few months or for a year or longer.  The put could perhaps be on a long dated US Treasury Bond fund or something related to the prices of long dated USTs, or their yields as a call.

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TBT is designed to track the 200% inverse of the daily performance of the Barclays Capital 20+ Year U.S. Treasury Bond Index. This causes price decay of the ETF over the long term as the futures contracts are renewed daily in a flat market. Example:

 

In a flat market moving +/- 5% a 2x ETF moves 10%- Starting at $100 then you get:  $110, $99, $108.90, $98.01.

 

A long Put on UBT Ultra Long 20+ year Treasuries would be more prudent because the price decay caused by daily futures contract expiration and your assumption the US Treasury Bill bubble will pop are aligned. I haven’t checked the option prices of UBT and TBT but I assume TBT calls are cheaper than UBT puts because of the time decay so this effect may already be reflected in the price.

 

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