Treasury Action Today & Thanks to JD!

Quite the action today in the fixed income market. I’m glad we got a little bounce, its good for the business I’m in, naked call selling! As my (one or two) readers know, I’ve been very bearish on the long end of the yield curve, especially for US debt…the duration has made for some great derivative trading.

I owe a big thanks to Joe Dowling, Hedge Fund Manager of NYC and Greenwhich origins. I had the opportunity to discuss investment strategy with Joe last year, when we discussed amongst other things the impact of the printing presses on treasuries. Joe fuelled my inspiration to learn and ramp up which has resulted in amazing gains in my portfolio, thanks Joe!

I just looked up my trade log, its been 11 months since I made my first speculation on fixed income with TBT!  Since then, I’ve moved onto ZB, which I think any serious trader should.

I’m planning on holding some form of my naked 120′000 July calls on ZB position open, and rolling as necessary.  There is still lots of this trade left, we are not even finished the first inning.  27 years in the making. My guess is these 120′000 strikes will expire worthless this month, and the 118′000’s next month, then so on and so forth.

Warning: I do not recommend shorting ZB calls, to anybody who doesn’t understand all the characteristics of how fixed-income can move combined with advance option models.  I consider myself extremely well equipped analytically and mathematically for trading these vehicles. They are not for the faint of heart.  I’m happy to answer e-mails and help anybody with questions.