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Trade of the Day: iShares iBoxx $ High Yid Corp Bond (ETF) (HYG)

We expect HYG to drop all the way back down to support

By John Jagerson and Wade Hansen, Editors, Strategic Trader


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Today, we’re opening a new bearish trade on iShares iBoxx $ High Yid Corp Bond ETF (NYSEARCA:HYG). As Treasury yields continue to rise and traders on Wall Street continue to adjust their risk profiles lower, high-yield bonds are suffering.

They were able to bounce back higher along with equities during the second half of February, but they took a turn for the worse at the start of March, and we expect HYG to drop all the way back down to the $85 support level the fund established in early February.

High-yield bond prices have nowhere to go but down if they want to generate yields that are going to be high enough to compete with “risk-free” Treasuries.

‘Buy to open’ the HYG April 85 Put (HYG180420P00085000) for a maximum price of $1.20.

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InvestorPlace advisers John Jagerson and S. Wade Hansen, both Chartered Market Technician (CMT) designees, are co-founders of LearningMarkets.com, as well as the co-editors of SlingShot Trader, a trading service designed to help you make options profits by trading the news. Get in on the next SlingShot Trader trade and get 1 free month today by clicking here.

Article printed from InvestorPlace Media, https://investorplace.com/2018/03/trade-of-the-day-ishares-iboxx-high-yid-corp-bond-etf-hyg/.

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