Interest rates are going to go up eventually — even my cockapoo, Sumo, knows this. So, you should consider shorting Treasuries.

One way to do this is with the ProShares UltraShort 20+ Year Treasury (TBT).

This ETF seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Lehman Brothers 20+ Year U.S. Treasury index.

There are three ways you can go about trading TBT depending on your risk tolerance:

1. Buy and hold TBT.

For every 1% decline in 20-year Treasuries, TBT rises approximately 2%. Simple enough.

2. Buy calls on TBT.

This is what I like to call a “rocket-fueled trade.” It offers you the chance to score big — a 1% percent move in 20-year T-bills could produce up to a 40% gain in your calls — but it very risky.

With this trade, timing is everything. You can buy calls on TBT up to 18 months out.

3. Buy TBT and write a covered call.

Here you are selling someone the right to buy the ETF from you at a fixed price sometime in the future. (Learn about the advantages of covered calls.)

If you bought the TBT today, and sold the January calls at roughly the same strike price as the ETF is currently trading, you’d get about an 8% return for six months if you got called out of the position.

And if you don’t get called out, you can do it again in January for a 16%-plus return per annum.

For more on how to short Treasuries, watch my “Short of the Week” video.

Let Michael Shulman help you make money on the short side of the stock market. Download a free copy of his new investing guide, Double Your Money — and Double it Again.