Short Intermediate-Long Term Bonds?

[wescobrk]

I don't know if this is a stupid way of doing it, but out of intellectual curiosity, if one were to short the long treasury, is buying long term puts on TLT a stupid idea for a small position?

[WideMoat]

Volatility on TLT is very high right now, so those TLT puts would be expensive to hold outright, unless volatility stays high for the duration.  Also the bid/ask is wide on the long dated puts, so use limit orders.  Looks like the tightest bid/ask on the close for the January 2021 put series was the 150 strike, 4.5/5.95, with 5 last trade.  That's a 22% implied volatility, 23 delta.

 

A higher probability trade on entry would be an at the money put spread.

[Kaegi2011]

I don't know if this is a stupid way of doing it, but out of intellectual curiosity, if one were to short the long treasury, is buying long term puts on TLT a stupid idea for a small position?

 

Another idea would be to go long treasury inverse ETFs or to short zero coupons.  However, neither will offer you leverage you might be looking for if you're seeking something really dramatic.