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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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