TLT - Long Term Treasuries

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Keynes's picture
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Joined: 02/27/2009
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Continuing my pursuit to find good instruments for my covered call strategy, I've started investing in TLT as suggested by George Baxter.  Because of the currently low yields, I'm building my position slowly, but the calls pay surprisingly high premiums, given an issue that isn't particularly volatile.  A flat TLT could yield 1-2% per month on the calls.  Of course it seems perfectly realistic to think that the price might come down substantially if we have a rally, but I'm skeptical of claims that we're headed for a meteoric rise, so treasuries seem a safe bet.  Especially once you cut your risk by selling the calls.