Mark Woodgate

Asked a question 3 months ago

I watch Steve Van Metre on YT and agree with him that interest rates are going to fall (closer) to zero. If I wanted to trade falling interest rates, principally on the US 30 year Treasury could I purchase /ZB PUT option futures to profit from the falling rates? A trade such as: Buy /ZB Put. Strike Price 171 . Expiry 19 Feb 2021 @ 1’21 Cost / Risk USD $1325.00 circa My assumption is: I profit from the trade IF rates fall, but not if rates rise (e.g.) IF say @ 15 Jan 2021 US 30 year Treasury interest rates are lower than today, therefore The /ZB PUT options futures are now ITM, and Any profit is the difference between the PUT option price (cost) today 1’21, and Whatever the price is of the /ZB PUT @ 171 on 15 Jan 2021 Is my assumption right? I’ve traded the markets before but not really in the futures space, hence the question to the group. *I also note that Raoul has indicated to buy March TLT calls, which might be an easier option. Thanks M