Thursday, May 23, 2013

Yesterday's TBT Put Still Open

This is probably getting a little confusing, but yesterday I saw divergences suggesting the "Flight to Safety" Treasuries were going to be up today so I opened a TLT Call and opened a TBT Put, TBT is the 2x leveraged inverse or "Bear" version of TLT, so in essence, by shorting TBT with a put, I am essentially going long TLT with 2x leverage as well as the Put/option leverage.

I closed TLT and took profits as soon as I got home from the Dr. this morning, but left TBT open.

Here's why...
 In the red box, I closed the TLT call opened yesterday afternoon-I told you this would be hit and run trading as the market gets volatile and choppy, but that was a nice 21.5% gain for about an hour or market exposure not incl. overnight.

I didn't close TBT puts because of the reason I warned you of yesterday-they have so little volume that it's hard to get a bid, big mistake.

 Any way, TBT needs to go down and TLT up for the TBT put to make money, as you can see on the 1 min it's leading negative.

Same on the 2 min

The 5 min is quite clear, this chart alone could tell anyone that the market was in trouble.

And the cycle in TBT 15 min with accumulation, confirmation, distribution and now decline.

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