Monday, January 11, 2010

Bookkeeping: Covering Most of iShares Barclays 20+ Year Treasury Bond (TLT)

The short of iShares Barclays 20+ Year Treasury Bond (TLT) is our one remaining true short of any size but with the distress in the issue the past few weeks I am going to cover here, and see if there can be an oversold bounce in the next week to re-engage. Frankly I am not sure what would cause a bounce since the US has no viable plan to act responsibly and continues to issue debt as if it's going out of style, but for a "slow money" trade (much like a currency) it's move quite a bit in 3 weeks.

This is another position I expect to be holding for many years.  Need to do a better job of position sizing in this ETF so the portfolio can benefit in larger sums.  For now I am covering almost the entire position in $88.80s and will leave a tiny sliver so it remains on my radar.

If unfamiliar with this ETF or the reasons for the "very long term" reasons US bonds need to be shorted see this piece from 2008 [Nov 21, 2008: Bookkeeping - Initiating Ultrashort Lehman 20+ Year Treasury (TBT)]

*TBT is the Ultrashort ETF which allows you to short TLT in "long only" accounts such as IRAs; in theory shorting TLT or being long TBT should be of similar benefit.

Short iShares Barclays 20+ Year Treasury Bond (TLT) in fund; no personal position

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