Are the US Treasury Bonds in a Bubble? (Who wants to invest with me?)

[FrankRep]

Are the US Treasury Bonds in a Bubble?


ProShares Launches First Short Treasury Bond ETFs

RTF Guide
May 2, 2008


ProFunds Group announced the launch of two new UltraShort ProShares ETFs.

The ProShares UltraShort Lehman 7-10 Year Treasury (Ticker: PST) and ProShares UltraShort Lehman 20+ Year Treasury (Ticker: TBT) will be the first ETFs designed to go up when U.S. Treasury bond prices fall.

ProShares, which introduced short ETFs to the marketplace in 2006, now offers 38 Short ProShares across a wide range of asset classes, sectors and investment styles.

ProShares short Treasury ETFs provide a way to hedge away some of the uncertainty about the Treasury market—or seek profit if Treasury prices fall.

"These new ProShares make it easier than ever to gain short exposure to intermediate- or long-term Treasury prices," said Michael Sapir, ProShares’ chairman. "It's as simple as buying an ETF."

Both new ETFs will be traded on the AMEX.
...

SOURCE:
http://www.etfguide.com/news/326/ProShares-Launches-First-Short-Treasury-Bond-ETFs/

 

[acptulsa]

I think they are.

And I think Premiere Wen is about to stick a pin in it.

 

[FrankRep]

I'm going to invest in TBT.

ProShares UltraShort Lehman 20+ Year Treasury

Twice the inverse of the daily performance of the Lehman Brothers 20+ Year U.S. Treasury Index


http://finance.yahoo.com/q?s=TBT

 

[Jordan]

I'm going to invest in TBT.

ProShares UltraShort Lehman 20+ Year Treasury

Twice the inverse of the daily performance of the Lehman Brothers 20+ Year U.S. Treasury Index


http://finance.yahoo.com/q?s=TBT

I love TBT, its created some hefty profits for me since the beginning of the new year with various option plays.

HOWEVER. Realize this is doubling the DAILY return, that is, if heavily volatility were to hit the treasury markets even several up days cannot replace one large down day.

I might suggest that you toss the leverage and instead buy in the money options on an unleveraged ETF. You'll still get the natural leverage of options, without too much downside should volatility arise.

 

[FrankRep]

I love TBT, its created some hefty profits for me since the beginning of the new year with various option plays.

HOWEVER. Realize this is doubling the DAILY return, that is, if heavily volatility were to hit the treasury markets even several up days cannot replace one large down day.

I might suggest that you toss the leverage and instead buy in the money options on an unleveraged ETF. You'll still get the natural leverage of options, without too much downside should volatility arise.

Do you have some example ETFs?

 

[FrankRep]

Barrick Gold Corporation (ABX)

http://finance.yahoo.com/q?s=ABX

Wouldn't hurt to own some of these shares too.