Investors who have been patiently waiting in the Proshares UltraShort 20-year Treasury (TBT), an ETF which shorts the 20-treasury note, are finally reaping their rewards as the fund is up 17% since mid March. As investors start to worry about the increasing risks of inflation, credit downgrades, or even a US sovereign default, they are demanding higher yields on US debt. Higher yields mean lower prices, and a higher TBT, as the leveraged fund aims to return 200% the inverse of long dated treasuries.
Rates above 5% would mean a healthy return for the fund. But the macroeconomic fundamentals of the American economy would suggest a 20 year note closer to 10%, meaning the potential for upside is huge.
Full Story: http://seekingalpha.com/article/139424-tbt-s-day-has-come?source=yahoo