As traders, our job is not completely done until we have our daily portion of letter soup. Stock-ticker-symbols flavor for the most part. But what if we try other flavors? T-Bills, T-Notes, T-Bonds, FRN, TIPS, and STRIPS?
These are US Treasury Securities. They are debt obligations issued by the US government to raise the cash needed to fund its operations and to help finance the federal deficit. Because these debt obligations are backed by the “full faith and credit” of the government, U.S. Treasuries are generally considered the safest of all investments. In short: you are buying debt.
But you are a hardcore trader and won’t touch something like “Fixed Income” because that’s for Mom and Pop. Like Mr. Buffett, it wouldn’t take you a nanosecond to go into stocks.
However, even if we never touch these instruments during our lifespan, as investors we have to know what are they, how to buy and sell them and how to build a portfolio with them. What are the available bond ETFs? What are the differences between Corporate and US Treasury Bonds? How bonds behave in different interest rates environments? Why institutions invest in it? What are their roles in the economy and how do they move the financial markets? How would they fit into a diversified portfolio during a market crash? Are they really the safest of all investments?
Our coach Tyler has put together some great material on the Tales of a Technician blog. Check it out: https://bit.ly/Bond-TreasuryBond
Chart of the Day
The chart above pictures the composition of TLT: the super famous, highly liquid, iShares 20+ Year Treasury Bond ETF. It was created in 2002 to track Barclays Capital U.S. 20+ Year Treasury Bond Index
Video of the day
Italian Debt Crisis
Coach Keith King links up with Trading Justice on Episode 271 to chat about the The Italian Debt Crisis
Coaches Lounge 11am EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Coaches Show Replay
If you missed last night’s episode where Coach Gino & Coach Noah talked about How to Play a Gap or would like to watch it again, check it out here.
Condors for Cash Flow MMG 7pm EST –
The Condors for Cash Flow system is a high probability option selling strategy designed to generate passive income over time. Join Coach Tyler & Coach Tim tonight to go over August’s and September’s orders.