Bouncing Around Ideas for TLT

I'll take one last look at option considerations here against outstanding positions or creating exposure in slightly non-traditional ways. When I continue to look at the iShares Barclays 20+ Year US Treasury Fund (TLT), what comes to mind is traders who believe it may bounce but the bounce may last, or traders who believe it will remain depressed but only for a short time.

First, holders who believe TLT may be in for an oversold bounce aren't quite as confident about a long-term rebound from here. In that case, I would look to a calendar-put spread or diagonal put spread. For instance, if I were long TLT, I would consider buying the August $105 put and selling the July $105 puts for a cost around $0.82. The theory is TLT won't close much below or anywhere below $105 come July expiration, or if I felt there would be a bounce where I could buy back the short July put for pennies, then maintain my August put....206 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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