A new CSP position was established today on ProShares UltraShort 20+ Year Treasury (TBT). All prices include IB commissions.
This is the third position on TBT.
This position represents a new strategy for idle cash. The idea is to earn interest at the current 30 Year Treasury rate (3.12%) or more for a period of 1 year or less. I chose the lowest possible strike and shortest expiration that met the criteria. The 14 strike provides 25% downside protection at the current price through Jan 2013, and is 20% below the 52 week low of $17.28, which also happens to be the lowest close since inception. With interest rates at historic lows, and unlikely to go much lower, this seems like a pretty safe bet and it beats leaving cash in the account at zero interest.
| Date | Stock | Description | Transaction | Status | Stock Investment | Income Generated |
|---|---|---|---|---|---|---|
| 1/25/2012 | TBT | CSP Margin Used | CSP 400 TBT @ 14.00 | ($5,600.00) | ||
| 1/25/2012 | TBT | Initial Put Option | STO 4 Jan13 14.00 Put @ 0.57 | $229.70 |
Position Summary
| Cost Basis | ($5,600.00) |
| Income Generated | $229.70 |
| Percent Income Generated | 4.10% |
| Annualized Income Generated | 4.17% |
| Net Profit If Assigned | $229.70 |
| Percent Return If Assigned | 4.10% |
| Annualized Return If Assigned | 4.17% |
| Days Held to Expiration | 359 days |
