Recommendations

By Marc Nemenoff
04 November 2009 @ 10:18 am EDT

Financials: Bonds are currently 11 lower at 118’23, the 10 Yr. Notes 6 lower at 117’31, the 5 Yr. Notes 3 lower at 116’06 and the 2 Yr. Notes 1 lower at 108’24. If you continue to hold the combination of short Bond futures and short the 116’00 put, my recommendation for you remains the same. If the market allows cover the 116’00 put at 15 points (yesterday it traded at 16, currently at 30). If you cover the put at 15 I would sell a Jan. 115’00 put at 1’00 or better to replace it. Of course the best case scenario would be that the Bonds drop below the 116’00 level and you ultimately get assigned a long position against your short future at 116’00 + the premium you collected from being short the 166’00 put.

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