Trade idea
BONDS sell puts on bonds
The speaker believes that rates are going higher, which would lead to lower bond prices. Therefore, selling puts on bonds is a strategy to profit from this expected decline. The speaker also mentions that bonds have underperformed other assets in the long term, suggesting a potential for further underperformance.
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Strategysell puts on bonds
Assetfixed_income
Time horizonshort-term
Entry / triggerif the speaker believes rates are going higher, which implies bonds are going lower
Target / exitnot explicitly stated
Invalidation / stopnot explicitly stated
SpeakerTom Sausnoff
Risks- market risk
- interest rate risk
- liquidity risk
Trade idea
Bonds put options
The speaker is considering buying put options on bonds if they fall below 113 handle, anticipating a potential rebound. The strategy is based on the belief that a break below 6,000 on the S&P 500 could trigger a flight to quality, pushing bond prices higher. The trade is positioned as a short-term opportunity with a defined risk and reward profile.
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Strategyput options
Assetfixed_income
ExpirationMay
Time horizonshort-term
Entry / triggerBonds fall below 113 handle
Target / exitBonds rise to around 114 handle
Invalidation / stopIf bonds do not fall below 113 handle, the trade is invalid
SpeakerScott
Risks- Market conditions may not support the anticipated rebound
- Interest rate changes could impact bond prices
Trade idea
Bonds hedge
The speaker is long bonds, having bought them last night and sold them out, but still holding short puts. They consider bonds a good hedge, especially given their recent performance as a market leader. The speaker suggests that bonds will indicate the direction of the market, making them a useful indicator for future market movements.
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Strategyhedge
Assetfixed_income
Time horizonshort-term
Entry / triggerBonds have been the leader for the last couple of days
Target / exitNot specified
Invalidation / stopNot specified
SpeakerSpeaker
Risks- Market volatility
- Interest rate changes
- Economic downturn
Trade idea
Bonds put selling
The speaker is shorting the 110 puts on bonds, which are trading around 58. They sold them at 54 and 50, indicating a belief that the market will not move significantly against their short position. The speaker notes that bonds are down 24 ticks, suggesting a potential for the put positions to profit if the market continues to decline. However, the risk of the market moving against the short position is a key consideration.
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Strategyput selling
Assetfixed_income
ExpirationAugust
Time horizonshort-term
Entry / triggermarket down 24 ticks
Target / exit54 and 50
Invalidation / stopmarket moves against the short position
SpeakerScott
Risks- Market reversal
- increased volatility
- unexpected economic events
Trade idea
Bonds Buy bonds during a rally
The speaker's trade idea involves buying bonds during a rally, as they have shown significant gains. The rally was over two points, reaching above 112, and the speaker took profits from the trade. This indicates a successful strategy of buying bonds during a rally, with a clear entry and exit point.
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StrategyBuy bonds during a rally
AssetFixed Income
Time horizonShort-term (2 weeks)
Entry / triggerBonds are at a low point and show signs of a rally
Target / exitBonds rally over two points
Invalidation / stopIf bonds fail to rally and continue to decline
SpeakerThe speaker
Risks- Market volatility
- Potential for a reversal in the rally
Trade idea
Bonds selling puts
The speaker is selling puts on bonds at 112, anticipating a potential price drop to 110. The rationale is based on the current yield levels being the highest in 19 years, suggesting a possible continuation of the downward trend. The risk is limited to the premium paid for the puts, and the trade is considered a hedge against a short position in the broader market. The invalidation level is set at 116, indicating a potential reversal of the trend.
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Strategyselling puts
Assetfixed_income
Expirationunknown
Time horizonshort-term
Entry / triggerbond prices at 110
Target / exit110
Invalidation / stop116
Speakerspeaker
Risks- Market volatility
- Unexpected Fed policy changes
- Interest rate fluctuations
Trade idea
Bonds Shorting June 112 puts
The speaker is short June 112 puts on bonds, having sold them last week when bonds were lower. The rationale is based on the current market conditions and the speaker's assessment of bond prices. The trade idea is to profit from a potential rise in bond prices, with the puts acting as a hedge against downward movement.
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StrategyShorting June 112 puts
AssetFixed Income
ExpirationJune
Time horizonNot explicitly stated
Entry / triggerBonds were four or five ticks lower than current levels
Target / exitNot explicitly stated
Invalidation / stopNot explicitly stated
SpeakerSpeaker
Risks- Market volatility
- Interest rate changes
- Liquidity issues
Trade idea
Bonds buying bonds due to their relative value compared to other instruments
The speaker suggests getting long bonds because they are currently cheaper than other instruments on the board. The 114 puts have some value, and selling them would break even at 113. The speaker believes it will be hard to lower rates without raising them, which would justify a 113 print in bonds. However, the speaker acknowledges that the bond market's movement is unpredictable and that no one can accurately predict it.
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Strategybuying bonds due to their relative value compared to other instruments
Assetfixed_income
Time horizonnot explicitly stated
Entry / triggerwhen bonds are cheaper than other instruments on the board
Target / exitnot explicitly stated
Invalidation / stopnot explicitly stated
Speakerunknown
Risks- Interest rate changes
- Market volatility
- Uncertainty in economic conditions
Q&A
What are the current market conditions for bonds?
The speaker discusses the current state of bonds, noting that they are trading near their lows, with specific mention of ZB (2-year Treasury) and AMs (10-year Treasury). The speaker also mentions the upcoming change in the Fed chair and the potential impact on bond markets.
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Actionable takeawayBonds are currently trading near their lows, and the market may be affected by the change in the Fed chair.
Q&A
Is there still correlation between rates and bonds from '08 till now?
Bonds and interest rates move inversely. However, there is uncertainty about the current correlation, with some suggesting that both are doing a little bit of this. The speaker believes that bonds are going to break, and markets are going to break as well, with interest rates going up.
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Actionable takeawayThe correlation between interest rates and bonds is inversely related, but there is uncertainty about its current state. The speaker suggests that bonds and markets may break, with interest rates rising.
Q&A
The S&P keeps hitting fresh records even with long-term yields elevated. In fact, last night I think the bonds the ZB traded in the one in the 107 handle.
The speaker mentions that the ZB (likely the 10-year Treasury bond) traded in the 107 handle, which is a reference to the price level. They suggest that this is a guaranteed rate hike, indicating that the elevated yields are a sign of anticipated interest rate increases.
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Actionable takeawayElevated long-term yields, such as the ZB trading in the 107 handle, are seen as a signal of expected rate hikes, which can impact market dynamics and investor sentiment.
Q&A
Bonds are down. They're weak. 109 and change. 10906. Down six ticks. Is this going to hurt her?
Bonds being down indicates mortgage rates are likely at their highest levels, which could hurt the daughter's mortgage rates.
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Actionable takeawayHigh bond yields suggest higher mortgage rates, which could be costly for the daughter's mortgage.
Q&A
What are the current market conditions?
The markets are showing minimal movement, with the S&P and NASDAQ unchanged. Gold and silver have shown upward movement, with gold up almost five dollars and silver up 89,000. Bitcoin and Ethereum have also seen some movement, with Bitcoin catching a bid and Ethereum rising above $3,000. Bonds are stuck in a range, with the 114s at 11521. The implied volatility (IV) in the bond market is very low.
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Actionable takeawayTraders should be aware of the low volatility in the bond market and the higher volatility in commodities like gold and silver.
Q&A
is the most important portfolio construction question of 2026 whether investors have become too dependent on stocks.
No, because the returns from equities have been so strong compared to bonds, and it's worked. However, there is a concern about whether this dependency will change, and until that happens, the course should be maintained.
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Actionable takeawayMaintain the current course in portfolio construction as equities have outperformed bonds, but be cautious about potential changes in market dynamics.
Q&A
What did you do with bonds?
The speaker mentioned being flat with bonds, indicating no active position or trade in bonds.
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Actionable takeawayThe speaker had no active position in bonds at the time of the discussion.
Q&A
What was the best trade the speaker made in the last 2 weeks?
The best trade the speaker made in the last 2 weeks was buying bonds, which rallied over two points and reached above 112.
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Actionable takeawayBuying bonds during a rally can be a profitable trade strategy.
Q&A
Conventional wisdom, Mr. Batista says when bonds rally
Bonds can rally for various reasons, including geopolitical fears, but the 10-year yield hitting its highest in 19 months during geopolitical tensions shows the textbook may not always apply. Strategic trading involves appreciating price and making decisions based on judgment of whether the price is cheap or expensive.
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Actionable takeawayStrategic trading involves understanding price dynamics and making decisions based on judgment rather than relying solely on conventional wisdom.