I took advantage of this morning's stock bounce to enter a long TLT position (a short put spread). Though there was no specific Chaikin buy signal, the trade is a hedge against my one long stock holding. Bonds generally go in the opposite direction as stocks. And I'm very bearish on stocks despite what may be a support bounce today. Option spread trades give you room to be wrong (I breakeven even if Treasuries pull back to 121.41 by Feb expiration) and offer richer rewards relative to risk during periods of high implied volatility. Relative strength and money flow indicators support this short term trade. We are approaching Overbought, but I'm willing to withstand a small pullback.
Here's the tade: SOLD -10 VERTICAL TLT 100 FEB 16 122/120 PUT @.59
Here's the tade: SOLD -10 VERTICAL TLT 100 FEB 16 122/120 PUT @.59
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