USG bond ETF $TLT options, inspired by CryptoHayesHello. This is my overnight setup for the weekend. I wanted to hold short or open long equities rather than bonds but it's not feasible at the moment.
Unfortunately this is posted after market close, but will serve as a journal for how poorly/fantastically I play it.
A funky strangle, with a 1:1:1 ratio:
Mar 19 +140C @ 0.65
Mar 19 +135P @ 1.45
Apr 16 +100P @ 0.07
Profit zone:
~$133 > x < ~$141
What I am planning:
For TLT to rise rapidly and CryptoHayes to be wrong, letting me roll/close in profit, covering the initial costs of all 3 positions along with profit. This is why i decided to buy the calls closer to the money. If I am wrong on Monday's directional close, I will likely close all 3 positions and take the loss. The expiries are not good.
Mistakes I can point out immediately:
I've chosen options too close to expiry
I expect movement and have not hedged for no mvement
I may have opened too early just to have a position open
Personal consumption is on the rise, and that may lead to inflation
Reason for the Mar 19 140C call: I am very bullish on bonds due to recent news. Stimulus, taxes confirmed not to be reduced. You've got to be mental to think the USG would want to raise rates. Though consumer spending is almost back to previous highs...
Reason for Mar 19 135P: Maybe it'll go down now. Reflation due to easing of Covid lockdowns.
Reason for Apr 16 100P: I'm certain this is not how you do it, but it's my "tail risk", cheap hedge in case yield hell breaks loose.
Better picture because the preview is missing some items:
% Compare of TLT and 30 year yield
Personal Consumption
What's CryptoHayes would have instead recommended: go ape mode on bitcoin, ape mode hedge on bond yields.
