Spread sees rally in Treasury ETF

optionMONSTER

A big call spread topped the option trade in the iShares 20+ Year Treasury Bond Fund on Friday.

More than 111,000 TLT options traded, twice the daily average. optionMONSTER's Heat Seeker system shows that 23,750 March 112 calls were bought for the ask price of $0.87, while the same number of the March 118 calls were sold for the bid of $0.18. Volume was well above the previous open interest at each strike, indicating that these are new positions.

The trader is spending $0.69 to open this vertical spread , which is the maximum amount that can be lost. The potential gain is $5.31 if the TLT is above $118 at expiration. (See our Education section)

The TLT finished the day down 1.08 percent to $106.19, the middle of its recent range. Shares were down at a low of $102.11 in August and above $124 at the start of May.


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