<< I did convert one of the legs into a bull put spread and I'll keep running that one out over time. If the Fed is going to maintain low rates for the long term treasuries, it's free money to sell a put spread and have time erode the value and make money on the trade.
So, I'll keep rolling this trade out over time, selling more short term premium each month. >>
Decided to take the profits off the table and resell the spread when it's back down near the bottom of the developing channel. I thought about this last time when the TLT was up near $123 but didn't and left some good money off the table.
Using a bull put spread won't make as much profit on a percentage basis as getting the timing right on a bull call spread. But with the Fed running Operation Twist, it's going to help put a floor on how far the TLT will fall thereby protecting a sold put spread.
By closing out the position now for about 2/3 of max gain on the trade, if there's a pullback, I'll be able to resell it or the next month further out spread for a high value rather than possibly riding it down and back up again and wasting the time erosion.
