.guyinlaw wrote: ↑Wed Mar 25, 2020 1:12 amPlease be careful with this strategy.
1. TMF will not provide the buffer as expected..
The upside for TMF from $41 is IMO maximum up to $60, in the near term. The recent peak of TMF -$58.3 happened when 30Y yield dropped below 0.9%, which is very unlikely. So IMO TMF has maximum upside of 50% in the near term
Currently UPRO is @ $23. When S&P500 was at ~1600 (50% decline from peak) UPRO was ~$9.6 in June 2013. (The all time low for UPRO was $2.03 in July 2009.)
2. In 2019 investors were "living the dream." Stocks were up 30% and US Govt bonds, the risk-free asset, were also up. (EVD up 17%, TMF up 39%). This was not normal. So don't look at the last 1 year performance to stick with this..
Many experts are calling the COVID crash to be worse than GFC.
Is SPY is going to go down to 2174 from here the recent low? It held that very well, UPRO was I think around $18. I might start selling UPRO $18 puts. Due to high volatility they are giving $1.55 for May $18 puts, essentially you are buying UPRO at $16.3!