The Fed seems pretty clear that they're going to be lowering interest rates at this month's meeting. Seems like selling put spreads on the bond ETF's (TLT, BND) is an obvious play. Not a get rich trade, but it seems like an easy couple of bucks. What am I missing?
Posted by 8805
5 Comments
You’re about four months too late. All the cuts expected for this year are already priced in. The chance of more cuts than expected are very low, though admittedly not zero. However, I think there’s a higher risk of less cuts than expected than more cuts, unless the economy takes a sudden nose dive.
If you want to make a play on 2025 cuts, that might be viable, but a lot can happen between now and Inauguration Day of next year. This is an election year, after all.
Easy peasy. Go back in time and buy 30 year treasuries about 3 months ago.
Buying puts on spy or any of the other companies that are close to ath is probably a better strategy that’s not priced in already
You’re missing that you’re not the only one that knows the Feds gonna lower rates. You really think the rates market isn’t going to price that in before they actually cut rates? Not to mention that bonds have plenty of other price drivers outside of what the overnight rate is set at.
Sorry to say but… Generally speaking, if we talk about it on Reddit, or hell, if you yourself know about _anything_ it is already priced in.