Traders Are Betting On Big Gains Ahead For The TLT

Analyst Paul Weisbruch of Street One Financial brings us his daily fund flows update, which today points out some interesting action in two of the largest ETFs, along with options traders hoping for more upside in Treasuries.

SPY Downside Bets, DIA Inflows

While we have reported mostly upside call trading in SPY lately, the SPX’s failure to close at new highs seems to have encouraged some downside put activity in February options. Specifically, the February 225 puts have traded this week (SPY currently has a high $228 handle, so these are well out of the money).

Elsewhere, even though there have been decent sized outflows in SPY this week (over $4.7 billion out), we continue to see bids around in DIA (DJ Industrials), with more than $1 billion entering the fund via creation activity in recent sessions.

Traders Hoping For More TLT Upside

In other action, there has been a bit of an appetite for out-of-the-money calls in TLT (iShares 20+ Year Treasury Bond) this week involving March 127 strikes. TLT is up about 1% this morning, and the fund has not been near 127 since before Trump’s election, but there is still more than a month left until expiration of these options.

Should bond yields continue to fall as some pundits are calling for, TLT could rise enough to put these bets into the money.

The iShares Barclays 20+ Yr Treas.Bond ETF (NASDAQ:TLT) was trading at $121.86 per share on Wednesday morning, up $1.26 (+1.04%). Year-to-date, TLT has gained 2.29%, versus a 2.42% rise in the benchmark S&P 500 index during the same period.

TLT currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #18 of 27 ETFs in the Government Bonds ETFs category.


Disclaimer: The content of this article is excerpted from a daily newsletter from Street One Financial. While ETF Daily News may edit the contents and add a relevant title to the piece, the author, Paul Weisbruch, does not endorse or recommend any issuer or security mentioned herein.

About the Author: Paul Weisbruch

paul-weisbruchPaul Weisbruch is the VP of ETF/Options Sales and Trading at Street One Financial. Prior to joining the team at Street One, Paul served as the Director of RIA and Institutional ETF Sales at RevenueShares ETFs from December 2007 until November of 2009. Before RevenueShares, Paul was employed by Susquehanna International Group from 2000 until 2007 serving in roles including OTC/NYSE Institutional Block Trading, Nasdaq/OTC Market Making, ETF/Derivatives Intelligence and Strategy, Algorithmic Trading, as well as acting as the PHLX Floor Specialist in the ETFs, SPY and DIA.Paul has been actively involved in the ETF space from both a product and trading standpoint since 2000. Additionally, Paul has well forged relationships with national RIAs, institutional pension fund managers and consultants, mutual fund and hedge fund managers, and also the ETF media. Co-authoring the “S1F ETF Daily” since 2009, the daily piece has become a must for many portfolio managers in the ETF space, with segments regularly appearing in the likes of Barron’s, WSJ, and ETFTrends.com for instance.

He holds his Series 4 (Registered Options Principal), 6, 7, 55 (Equity Trader), 63, and 65 licenses. He graduated from the University of Pittsburgh (B.S. – Economics), graduating magna cum laude, and has an MBA from Villanova University.

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