The ProShares UltraShort 20+ Year Treasury Bond Fund is climbing off all-time lows, and one option trader is looking for more gains.
The TBT closed yesterday at $15.57, up 0.16 percent on the day. The exchange-traded fund hit a new low of $14.08 on July 25 but is now just back to levels from a month ago. Shares have been trending lower from a high of $75 set in June 2008 and were above $27 only a year ago.
A trader bought 10,000 December 20 calls for the ask price of $0.21 and sold 20,000 December 22 calls for $0.10 and $0.11, according to optionMONSTER's Heat Seeker tracking system. The volume at each strike was more than open interest, so this is a new ratio spread .
This call vertical was opened at no cost and won't lose anything if the TBT remains below $20 through expiration. The maximum gain would come if the fund is up around $22 at that time, a level last seen in late October. (See our Education section)
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