Trade of the Week: Bonds

Trade of the Week

While options block trades can potentially provide insight into what the smart money is doing, it’s impossible to know for sure what the goal of a big trade is. For instance, a 22,000-lot call spread expiring in October appears to have been purchased in iShares 20+ Treasury Bond ETF (TLT) options. This would seem to be a very bullish trade on bonds (lower yields). However, we don’t know if this is a hedge or part of a different type of strategy, which isn’t necessarily a bet on bonds going significantly higher by October.