When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline.
Trade Alert - (TLT) – BUY
BUY the iShares Barclays 20+ Year Treasury Bond Fund (TLT) March 2025 $94-$97 in-the-money vertical Bear Put debit spread at $2.65 or best
Opening Trade
2-27-2025
expiration date: March 21, 2025
Portfolio weighting: 10%
Number of Contracts = 40 contracts
The Core PCE Price Index, said to be the Fed’s inflation indicator, is out on Friday at 8:30 AM EST. I believe the number will come in hot, mirroring the 0.5% print we got on the Consumer Price Index two weeks ago.
We have a double top in the (TLT) setting up at $95, and I believe that inflation fears driven by tariffs and trade wars will prevent it from rising any higher. Also, it’s nice to have an extra “RISK OFF” position to balance out my existing longs. Having a position in a different asset class is also a good risk-mitigating measure.
This is a bet that the ten-year US Treasury yield will not fall below the January low at 4.10%.
I am therefore buying the iShares Barclays 20+ Year Treasury Bond Fund (TLT) March 2025 $94-$97 in-the-money vertical Bear PUT debit spread at $2.65 or best.
Don’t pay more than $2.75, or you’ll be chasing on a risk/reward basis.
The only way to lose money on this position is if the US economy absolutely catches on fire and sends interest rates soaring in the next three weeks.
This is a bet that the (TLT) will not rise above $94.00 by the March 21 option expiration in 16 trading days.
Here are the specific trades you need to execute this position:
Buy 40 March 2025 (TLT) $97 puts at………….………$6.00
Sell short 40 March 2025 (TLT) $94 puts at…………$3.35
Net Cost:………………………….………..………….….........$2.65
Potential Profit: $3.00 - $2.65 = $0.35
(40 X 100 X $0.35) = $1,400 or 13.21% in 16 trading days.
It’s now the Opening Act for the Bond Market
If you are uncertain about how to execute an options spread, please watch my training video by clicking here.
The best execution can be had by placing your bid for the entire spread in the middle market and waiting for the market to come to you. The difference between the bid and the offer on these deep-in-the-money spread trades can be enormous.
Don’t execute the legs individually or you will end up losing much of your profit. Spread pricing can be very volatile on expiration months farther out.
Keep in mind that these are ballpark prices at best. After the alerts go out, prices can be all over the map.
