Trade Alert - Selling new TLT Puts
Monday, August 4th 2025
Chiswick, West London
By Tom Dyson, Investment Director
We’ve been enhancing the income we earn on our large cash position by selling out-of-the-money puts on TLT. TLT is the symbol for the iShares 20+ Year Treasury Bond ETF.
You make 4% or so (annualized) by just keeping your cash in a money market fund. And then you can make another 5% or so (annualized) from the put option premium we earn by selling these out-of-the-money puts… for a total of around 9% in income from holding cash. Not bad.
I like this trade as it feels like long bond yields have a ceiling around 5% (which means TLT has a floor around $80) so therefore selling puts for income on TLT makes sense with long bond yields currently at 4.8%.