I cut my short 10-year note and long bond treasury futures positions in half this week. It seems we are at an emotional extreme around fears of a rate increase. This is about where we were last month with fears of a rate cut. I’m still buying the argument that we are in a trading range on the ten-year treasury yield from 4.7% to 5.25%. But if we do get a break out, it will be towards higher rates (lower bond prices). That’s why I still have half my short position on.
Don’t Try this at home disclaimer: Bond Futures may be for me but they are probably not for you. Futures are highly leveraged and you can lose way more than your entire investment in futures. If you play too much in options, you can even lose your home and everything you own. Now who would that be good for?