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Bullish position in short-Treasury fund

Chris McKhann (chris.mckhann@optionmonster.com)

The ProShares UltraShort 20+ Year Treasury Fund is just off all-time lows, but a combination trade appears to be taking a bullish position.

optionMONSTER's systems show that a trader bought 5,983 March 16 calls for $1.09 against open interest at the strike of 9,975. He or she also sold the same number of March 15 puts for the bid price of $1.15 in volume that was more than open interest and clearly a new position.

This trade could be an outright bullish bet looking for a bounce from here, or it could be a collar on a short position in the TBT. It could also be a relative-value play , as the correlation between the TBT and the S&P 500 is very high at 0.95. (See our Education section)

The TBT is down 1.3 percent to $15.37. It was above $17 two weeks ago and is less than half of what it was in July 2011. It touched an all-time low of $14.08, in its relatively short life, at the end of July.

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