Thursday's Trade

There are perhaps six trading days before options expiry before the settlement of contracts that are in the money. So far, the bulk of the put options giving traders the right to sell copious quantities of treasuries into the market below the 140 strike price remains and elusive goal.

http://www.optionsclearing.com/about/publications/expiration-calendar.jsp

This mornings' statement by the appointed Italian prime minister Mario Draghi, (a Goldman Sachs alumnus) that the ECB will not monetize debt or lend to the IMF sent the treasury futures contract soaring to the 50-day MA. Why Mario Draghi would say this when his country is obviously at risk of default is plainly obvious.

imo, this is a short term stop gap measure designed to promote U.S. treasury bonds by increasing risk temprorarily elsewhere. There hasn't been any news on the settlement of the auction just yet on the 30-year long bond, just the TIPs. My guess is that the sale of these bonds is still open and probably gathering dust.

There is no escaping the chart on the USB price, the price has to take a major breather. If this happens, then GBN.V shares will benefit directly as it had in 2008. But, as the price of bonds rise, GBN.V shares come under pressure.

source: http://quotes.ino.com/chart/index.html?s=CBOT_ZB.Z11.E&t=&a=&w=&v=d1

-F6