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|
|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|