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Large $524K TLT Call Spread: Trade Yields 2.2% Gain as Stock Advances
A significant options trade just occurred in iShares 20+ Year Treasury Bond ETF (TLT): a call spread worth more than $524,000, targeting the $82 and $89 strikes for the June 30, 2025 expiration. In a matter of hours, this strategy posted a 2.2% gain as TLT shares nudged higher by 1.01%. Here’s what stands out from the data and what it might suggest about trader sentiment heading into the end of the month.
Trade Details: High Volume Call Spread on TLT
| Trade Parameter | Details |
|---|---|
| Expiration | 30-Jun-25 |
| Strikes | 82/89 Call Spread |
| Number of Contracts | 2,200 |
| Days to Expiration | 18 |
| VWAP Trade Price | 4.76 |
| VWAP Bid / Ask | 4.71 / 4.83 |
| Stock Reference Price at Trade | 86.92 |
| Current Spread Price (02:25:00) | 4.87 |
| Spread Gain | +0.10 (2.2%) |
For those wanting more granular data or to screen additional multi-leg trades, see the multi-leg trade analyzer.
Potential Payout: $246K Max Profit if TLT Hits $89 by Expiry
The trader spent over $524,000 to put on this position, which has a maximum profit potential of roughly $246,000 if TLT closes at or above $89 at expiration. The payoff is capped at the difference between the two strike prices, minus the premium paid. With TLT trading at $87.01 after a modest bump from $86.92, this bet is leaning bullish for the short term—requiring just a bit more upside in under three weeks.
Technical Indicators: Slight Momentum, But Still Below Major Averages
| Metric | Value |
|---|---|
| Stock Price | 87.01 |
| Price Change Today | +0.87 (+1.01%) |
| Open Jump | +0.9% |
| From 52W Low | +4.5% |
| From 52W High | -14.4% |
| From 20-Day MA | +1.7% |
| From 50-Day MA | -0.3% |
| From 250-Day MA | -5.0% |
While TLT is currently trading above its 20-day moving average, it’s still slightly below its 50-day and noticeably below its 250-day moving average, reflecting longer-term headwinds. The 20-day versus 50-day MA sits at -1.9%, and the 20-day versus 250-day at -6.5%, underscoring a trend of gradual weakness. Relative to the SPY ETF, TLT has underperformed across most time frames, as shown below.
Performance Comparison: TLT Continues to Underperform SPY
| Duration | TLT Return | Low | High | SPY Return |
|---|---|---|---|---|
| Today | +1.0% | 86.60 | 87.18 | +0.2% |
| 2 Week | +2.3% | 84.79 | 87.18 | +2.6% |
| 1 Month | +0.3% | 83.30 | 87.18 | +6.8% |
| 3 Month | -2.7% | 83.30 | 94.09 | +8.7% |
| 6 Month | -3.6% | 83.30 | 94.09 | -0.2% |
| 1 Year | -1.1% | 83.30 | 101.64 | +13.6% |
| YTD | +1.4% | 83.30 | 94.09 | +3.1% |
| 3 Year | -14.5% | 82.42 | 120.69 | +59.9% |
| 5 Year | -37.9% | 82.42 | 172.25 | +111.1% |
This snapshot highlights that, despite occasional short-term bounces, TLT remains in a persistent relative slump when compared to equities, especially over multi-year horizons.
Option Skew Indicator: Slightly Bearish Sentiment Remains
Market sentiment from the 30-day implied volatility skew remains slightly bearish with a 33% skew rank. While not at the most extreme end, this indicates that traders are still assigning a higher premium to downside protection than to upside risk, suggesting caution as we head into expiration—even with the recent bullish spread activity.
Takeaway: Tactical Bullishness Amid Structural Caution?
The sizable 2,200 contract call spread in TLT, bought for $524,000 and already returning a quick 2.2%, looks like a well-timed attempt to capture short-term strength while acknowledging capped upside. Despite technical indicators showing some life, the ETF’s persistent underperformance versus SPY and slightly bearish skew underscore lingering skepticism. With just 18 days to expiration, this trade will need further price appreciation to pay off fully—but it’s a strong reminder that some investors see tactical opportunities, even when the long-term trend has lagged.
If you’re interested in discovering more multi-leg strategies or scanning for additional opportunities, you can check the Multi-Leg Trade Screener for further research.
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