My editor at the WSJ asked me a question this morning about how best to trade on this Treasury Bubble Popping idea I wrote up yesterday.
I bought puts on the IEF, which mirrors Treasuries. Alternatively, you could also look to buy one of the ETFs that are supposed to move opposite of the Treasury Rates, such as the TBT. The problem with that approach is simply that you’re adding the complexity/hope that the guys running that ETF can successfully figure out how to stay inversely set up in their positions. I’d rather just buy puts or short an ETF that’s buying straight Treasuries.