Tomorrow is Quadruple Witching day when stock index futures, stock index options, stock options and stock futures expire. We expect our TLT put spread to expire worthless as the price gapped higher at the open of the past three days. Treasury notes appear to be trying to recover from oversold conditions as inflation fears have subsided a bit. Downward price momentum is dissipating and the current support level is holding up - now may be a good opportunity to open an October
expiration month TLT bull put spread.
TLT Position Update
TLT closed at $121.41 on Thursday â€“ the September put spread is approx. $900 in the black
The August 9th Couch Potato published a September expiration TLT put spread
We plan on letting the put spread worthless for an approx. $1,100 gain. However, if TLT pulls back significantly tomorrow (below $120.40) the best bet is to play it safe and buy back the short $120 strike put contracts. (see tables below)
October expiration month TLT bull put spread
We want the TLT put spread to generate a minimum .50 net credit AND we prefer an 80% probability that the short put contracts will expire worthless and we get to keep most of the sold premium. The spread in the table below complies with our trading rules for initiating the October expiration month option series TLT bull put spread (based on Thursday's closing prices). The suggestion is to submit an order to purchase/sell the option strikes prices below. Please confirm the correct option symbols with your broker.
As mentioned above, September expiration option contracts expire tomorrow and we expect the TLT put contracts to expire worthless.
Couch Potato Trader Disclaimer
All results reported in this section are hypothetical. While the numbers represented here may have been achieved or beaten by our readers, we make no representation that any individual investor achieved these exact results. The tracking for the plays listed in this section uses closing prices for the day the newsletter is published and it is not meant to imply that any reader actually received those prices (though many often do) or participated in these recommendations (even though many do). The portfolio represented here is hypothetical and for investment education purposes only. It is only an illustration of what type of gains a knowledgeable trader might receive utilizing these strategies. If you don't get close to these results, guess what. It isn't the fault of the strategies.