Trade Alert – (TLT) June 13, 2025 – TAKE PROFITS – SELL

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) – TAKE PROFITS

SELL the iShares Barclays 20+ Year Treasury Bond Fund (TLT) June 2025 $88-$91 in-the-money vertical Bear Put debit spread at $2.95 or best

 

Closing Trade

6-13-2025

expiration date: June 20, 2025

Portfolio weighting: 10%

Number of Contracts = 40 contracts

Usually, when there is a new war in the Middle East, you can count on a headlong flight to safety as investors pour into US Treasury bonds.

Not this time.

Israel’s attack on Iran has instead prompted a substantial selloff in the bond market, taking the (TLT) down a welcome $1.10. It is further evidence that the “Sell America” trade is still on, that American exceptionalism is over, and that foreigners are using every opportunity to withdraw money from the US.

Never waste a $1.10 move in the bond market, I say. With 83.33% of the maximum potential profit in hand, the risk/reward of continuing four more days until the June 20 option expiration, or even over a weekend, is no longer favorable.

The $24 billion 30-year bond auction yesterday went better than expected, surprising everyone. It could be just an anomaly. We live in a new world now, and even the oldest veterans are having to relearn their trading skills from the ground up.

Take the money and run! 

As a result, you get to take home $1,000, or 9.26% in 10 trading days. Well done and on to the next trade.

I am therefore selling the iShares Barclays 20+ Year Treasury Bond Fund (TLT) June 2025 $88-$91 in-the-money vertical Bear Put debit spread at $2.95 or best

If you don’t want to sit in front of a computer screen all day or live in a foreign time zone when the US stock market is closed, such as Australia, or don’t want to sit in front of a screen all day, simply enter a spread of Good-Until-Cancelled orders overnight, like  $2.95, $2.94, $2.93, $2.92, $2.91, and $2.90. You should get done on some or all of these.

I think the US bond market is in big trouble.

Confidence in US debt by foreign investors by the new administration in Washington DC, which has proposed withholding taxes on interest payments to foreign investors, capital controls, and even default. There is also extreme reluctance to invest in a country that has invested.

The US dollar has collapsed, eroding foreign interest further. Foreign capital is fleeing the US. Some $12 trillion of the $36 trillion in outstanding US debt is owned by foreign investors. There is a monster long bond issue in two weeks. I believe that the (TLT) will remain weak until then.

This was a bet that the (TLT) would not rise above $88.00 by the June 20 option expiration in 14 trading days.

Here are the specific trades you need to exit this position:

Sell 40 June 2025 (TLT) $91 puts at………………..….………..…$4.95

Buy to cover short 40 June 2025 (TLT) $88 puts at………..…$2.00

Net Proceeds:……………………………….……….……………………..$2.95

Profit: $2.95 – $2.70 = $0.25

(40 X 100 X $0.25) = $1,000, or 9.26% in 10 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.