As stocks have dropped and crude oil has continued to crater, investors have been seeking out safety in bonds. This has driven the 10-year Treasury yield to multiyear lows and sent the iShares 20+ Year Treasury Bond ETF (TLT) to a record high on Tuesday.
But maybe that sets up the opportunity to play for a bond turnaround. At least, that appears to be what options traders were figuring on Tuesday.
Even as the TLT soared, bearish put options were much more active than call options on Tuesday. And one of the most notable trades was the purchase of 2,500 January 131.50-strike puts for $1.55 per share.