To The Moon

As the US treasury yields and the US dollar index topped, the US treasuries began to climb.

The trading volume of call options contracts on TLT (the ETF tracks US Treasuries) increased.

data from Tiger Trade app

People may have different views towars the future trend of the stock market. But it’s a good opportunity to long/short US Treasuries as the yields topped.

Here are 2 ETFs that respectively long the Treasuries and Treasuries yields.

The chart below shows the relationship between the Treasuries and the ETFs.

Long the Treasuries - $TLT(TLT)$

$iShares 20+ Year Treasury Bond ETF(TLT)$ tracks the ICE U.S. Treasury 20+ Year Bond Index.

To put it simply, the ETF tracks the aforementioned index and holds bonds with maturities over 20 years, giving investors easy access to a diversified portfolio of long-term bonds.

Bond prices move in the opposite direction to yields: when TLT is going up, yields are going down, and vice versa.

NOTES: When you consider to buy TLT, it is important to consider the interest rates trends.

Bond prices move inversely to the trend of interest rates.

If you predict interest rates to rise, you’d better avoid TLT, which is more favorable in a lower interest rate environment.

However, if you predict a falling interest rate, you can invest based off this idea.

Long the Treasury yields - $ProShares UltraShort 20+ Year Treasury(TBT)$

$ProShares UltraShort 20+ Year Treasury(TBT)$, a 2x inverse ETF, tracks the ICE U.S. Treasury 20+ Year Bond Index. As it’s an inverse ETF, it basically tracks the movements in the long term bond prices.

To be specific, the 20-year+ Treasury yields generally move in the same direction as 10-year Treasury yields. Therefore, if the US10Y goes up, TBT goes up; and vice versa.

The following chart shows the relationship between the 10-year Treasury yield, the 20-year Treasury yield, the 30-year Treasury yield and TBT for the last year.

NOTES: TBT is a levered product you can use to bet on rising interest rates. It gives you-2x exposure to daily moves in U.S. Treasury 20+ Year Bond.

However, the -2x leverage also means greater compounding effects. If you consider buying TBT, you should be cautious about its leveraging feature and your holding time.

Summary

If you are positive on the Fed and future trend like the investors bought large amount of call options, you can look at $TLT(TLT)$ ;

If you are negative and believe the interest rates will go up, you can look at $ProShares UltraShort 20+ Year Treasury(TBT)$