Looking to Start a TBT Position? Not so Fast – The Bubble needs to Burst First

Published on Wednesday, 25 August 2010 01:06 Written by The Trader Next Door

New York, Aug 25^th (TradersHuddle.com) - The ProShares UltraShort 20+ Year Treasury ETF (NYSE:TBT) suffered a big decline today as it lost more than 3.28% as investors continue to seek the safety of the treasuries, as the economic worries continue.

The ProShares UltraShort 20+ Year Treasury ETF seeks twice the inverse of the daily performance of the Barclays Capital 20+ Year U.S. Treasury index. The fund normally invests at least 80% of assets to investments that, in combination, have economic characteristics that are the inverse to those of the index.

Smart money has been trying to time an entry into the TBT as they see a probable drop in the price of the bonds that continue to trade at record high prices, as the bubble continues to inflate. Doug Kaas , President of Palm Beach based hedge fund Seabreeze Partners announced a couple of days ago that he had been adding substantially to his position in the ProShares UltraShort 20+ Year Treasury ETF. The smart money is betting that there will be a counter trend move.

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