Trade View: Dealing with the volatility in US T-bonds — #SaxoStrats
The long end of the US bonds has been under pressure as yields have spiked. This has caused the volatility to increase which in turn has increased options premium, for both calls and puts.
The iron condor is defined risk strategy as it is consisted of short call spread (long/short call) and a short put spread (long/short put). Moreover the risk is contained within the width of the vertical spreads. The above example uses a $2-wide spread, which is the maximum loss minus any credit.
Underlying price: 124.17
Target: bonds to trade in range, below 127 call and above 119 put
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