Two New Ways to Hedge Against Rising Rates

Stock quotes in this article: PST , TBT , SDS , SSO , RYJUX , IEF , TLT  

RYJUX's result, of course, guarantees nothing. If you have any interest in PST or TBT, be it for hedging or speculating, I would suggest letting them trade for a couple of months to get a feel for how they might actually trade vs. your expectation.

One last point about expectations: As you look at the chart that compares IEF and TLT, you notice that TLT is more volatile, and that is how it should be, given the longer maturity date.

It makes sense to expect that TBT will more volatile than PST, regardless of whether either lives up to expectations.

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At the time of publication, Nusbaum was long SDS on behalf of clients, although positions may change at any time.

Roger Nusbaum is a portfolio manager with Your Source Financial of Phoenix, and the author of Random Roger's Big Picture Blog. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Nusbaum appreciates your feedback; click here to send him an email.





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