20-Year Treasuries (TLT) – Yields Fall off a Cliff – March 2nd, 2020

Neutral – TLT $155.31 – Treasuries

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Market Outlook:
The S&P 500 (SPY) has pulled back heavily on an acceleration of coronavirus cases outside of China. With risks still skewed to the downside as cases continue to grow over the weekend, we position for further weakness while seeking bounce opportunities next week in specific stocks. 

TLT Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang suggested that rates may have moved too far and has a high probability of a consolidation. TLT has reached extreme measures on both long and short term charts. Expecting TLT to consolidate, Tony suggests selling an April 9th 155.5/160 Call Vertical @ $1.70 Credit. As of Friday’s close, these calls were trading at $1.61 Credit.

We’ve structured this trade in OptionsPlay so you can analyze and view this trade along with the supporting technical chart at your convenience. You can also view the Options Action’s video by clicking on the following link: TLT OptionsAction Video

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