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January 24, 2013  Thu 2:14 AM CT

TBT: SEE CHART GET CHAIN FIND STRATEGIES
The ProShares UltraShort 20+ Year Treasury Bond Fund climbed as stocks rose yesterday, and a big option trade is looking for more upside.

optionMONSTER systems show that a trader bought 6,200 September 66 calls for $4.85 and sold the same number of September 62 puts for $4.65. This is clearly new positioning, as the open interest at those two strikes was 20 and 0 respectively.

The resulting combination trade is betting that the TBT will break above $66. The position cost $0.20 to open, which is the risk if the exchange-traded fund is between $62 and $66 at expiration in mid-September. The trader also faces the possibility of having to buy shares if they fall below $62. (See our Education section)

The TBT gained 0.31 percent to close at $64.41 and has been trending higher for the last couple of months. Interestingly, the TBT correlation to the S&P 500 right now is -0.52, while is usually near 1. The level has not been this low in more than a year.
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