HYG

pmotiveforce

I'm kind of conflicted. I would probably do better by a market pump tomorrow overall. But I will lose money on some straddles expiring EOW that are green in the put side. So I either want a mongo giant throbbing veiny shrek cock tomorrow that pushes those straddles to call side, or GSK and HYG only to take a shit and everything else to moon like no tomorrow. Then I can by puts.

Ilikegooddeals

Says in HYG. High yield corporate bond etf.

Ilikegooddeals

I know. It’s for HYG though, it never goes out of this range. So an order placed for this morning.

Aromatic-Tone5164

honestly? SOXS if you wanna gamble equities, start selling chunks of gains as soon as they come in gambling options? my picks would be 2026 dated ***puts*** on XLRE (real estate), XLF (finance sector / the bank basket), XLE (energy) if you want a big spicy one HYG, I'm holding a ton of puts on them. they're the high yield corporate bond ETF. tracks high risk corporate bonds which are typically high risk as hell and I think it's pretty implosion worthy.

Such-Yam-1131

Solid breakdown. Honestly, the deeper I’ve gotten into HY credit, the more I’ve realized how much nuance gets lost in these fund summaries. I’ve been following a newsletter that actually dissects the capital structure and issuer-level risk. It’s made a big difference in how I look at stuff like HYG.

No-Kings

HYG - Yes but junk bonds soar high when bond market shakes. JEPI - Yes but I also don’t believe it will perform worse in a bear market.

Short-Taro-5156

$HYG tends to be highly correlated to the equity market. It has a beta of 0.90, so that means if the market goes down 1% HYG will generally trade down ~0.9% barring idiosyncratic differences. This is not a great choice if you're pessimistic on the S&P500 unless you have another reason to believe high yield bonds will outperform. $JEPI is not a dividend equity fund, it's an equity *premium* income fund, which will mean the majority of the distributions are not from dividends, but from the fund writing covered call options on their equity portfolio (eg selling potential upside for income). Will decline less than the S&P500 in a bear market/outperform in a flat market but covered call strategies tend to perform poorly over the long-term given options skew.

No-Kings

Think beyond just SP500. $HYG Bonds - Diversified Junk Bonds will have the highest yield. Over 1k bonds represented rebalancing frequently. $JEPI - Good ol dividend equities, if their yield falls below downside losses, I’d be surprised. ESG Equal Weight International Index - Global Companies with solid moral leanings are less likely to be financially unstable. Equal weight will keep you most diversified. It’s not what you do in a bull market, but a bear market that makes you a good investor.

stockchaser317

All good, duder. I'm holding HYG leap puts still. Upcoming data will give us the directions the market will be heading.

Thats_So_Ravenous

Understood, I appreciate the direction. I had originally thought the inverse of what you were saying. I thought consumer loans would hit equity (firms specializing in consumer loans) first, but you're saying this will still cascade down from broader credit markets? A quick Goog search led me to: HYBB USHY and HYLB, Another individual mentioned HYG. I assume these would give me the exposure to the credit market through options?

cryptohorn

Puts on HYG

Ivy0789

Check out the P/C ratio on IWM and HYG. June looks interesting.

Such-Yam-1131

This chart’s basically a coiled spring. Credit spreads don’t sit this low forever, and when they snap, it gets ugly fast. HYG puts might be early, but not wrong. Been reading a credit-focused newsletter that’s been flagging this exact setup. If anyone’s deep into this side of the trade and wants the name, I can share.

tituschao

So if the economy deteriorates, the corporate bond yield goes up, bond price goes down, and you make money from your HYG puts?

diefy7321

$HYG puts open interests are crazy wtf.

mikerz85

HYG tanks after high yield credit spreads rapidly widen. Triggered by recessionary data shock, restrictive policy surprise, or abrupt rise in rates that raises default expectations. The spread spike forces redemptions and deleverage if, causing large volume liquidations of the bonds and quickly collapsing the ETF Basically, triggered in a few ways but it happens when liquidity dries up and defaults look likely 

dimethylhyperspace

I'm looking at the liquidity and spreads..the bid ask on these is wild. What would it take to tank HYG? A credit crisis?

IsleOfOne

Put spreads on HYG are enough to hedge you. Keep it simple.

Naive-Work6623

It’s an exchange-traded fund (ETF) that tracks a basket of high-yield (junk) corporate bonds. HYG tends to move with perceived credit risK. If CDS spreads widen (more fear of default), HYG usually falls And vise versa. Everyone think we in a credit bubble so I am taking a small bet on retail consensus nothing crazy.

LongevitySpinach

Bear call spread. Sell closer to the money call, buy the further out of the money. Yes, defined risk, limited reward. Hasn't gone my way yet because HYG has rallied somewhat.

LongevitySpinach

I've got May bear credit spread in HYG, but hasn't moved my way since I entered. Was thinking of adding to that position, but maybe I'll get more aggressive and buy some puts.

Naive-Work6623

$HYG puts. Source:Trust me bro

OccamsToothpaste

I don’t care what CNBC says. I don’t care about earnings season optimism. I don’t care if Powell whispers dovish nonsense into the wind. The market is structurally vulnerable. And Trump just lit the fuse. The Setup: The S&P 500 is levitating on zero-volume melt-up. Market breadth is collapsing—95% of gains are being driven by a handful of mega-cap names. Underneath? Rot. Small caps are flatlining, cyclicals are bleeding, and the bond market is screaming “danger.” Meanwhile: Geopolitical instability is growing in multiple hotspots. Bond yields are twitching like they smell blood. Consumer credit delinquencies are accelerating. And the Fed is boxed in—unable to cut without admitting failure. But the trigger is Trump. Not his politics. His instability. Why Monday: Trump’s legal exposure is converging with political escalation. Multiple sources point to a high-probability event hitting between Sunday night and Monday morning. This isn’t just a news story. It’s a signal. The algos will see “instability at the top of U.S. political leadership” and sell risk instantly. Not because they care about Trump—but because they’re trained to react to volatility catalysts. Markets don’t wait. They front-run fear. You won’t even have time to log in. Positioning (My Book, Not Advice): $SPY 4/15 495P — Loaded I don’t want the 500s. I want the break. If 495 goes, 480 is next. This is the breach point. $VIX 16C, 17C, 18C — Laddered Strike Spread This is mispriced. VIX is at complacency levels. A 3-5 point spike is on the table within minutes of market open. $QQQ 4/15 400P This is not just a hedge. It’s a structural bet. If tech unwinds, this is the drainpipe. Flows have been dangerously one-sided. $TLT May Calls Flight to safety. Simple. You don’t fight Treasury demand during panic. I’m positioned for a snapback rally in bonds. $HYG Puts High-yield credit is the truth serum. If HYG gaps down, it confirms contagion is spreading. Warning Signs to Watch Sunday Night: ES futures gapping down below 5150 Yen strength Gold pushing $2,400 Crypto pump and fade Sharp reversal in Apple, NVIDIA, or MSFT premarket If those align, it’s happening. And it won’t be orderly. Conclusion: I’m not here to argue politics. I’m not here to scream “crash” for karma. I’ve been tracking this system for 12 years. The market is a living organism, and right now it’s twitching. If you're still dreaming about all-time highs, wake up. Trump is the spark. The system is the powder keg. Monday. Watch.

ApartPresent1908

I don’t care what CNBC says. I don’t care about earnings season optimism. I don’t care if Powell whispers dovish nonsense into the wind. The market is structurally vulnerable. And Trump just lit the fuse. The Setup: The S&P 500 is levitating on zero-volume melt-up. Market breadth is collapsing—95% of gains are being driven by a handful of mega-cap names. Underneath? Rot. Small caps are flatlining, cyclicals are bleeding, and the bond market is screaming “danger.” Meanwhile: Geopolitical instability is growing in multiple hotspots. Bond yields are twitching like they smell blood. Consumer credit delinquencies are accelerating. And the Fed is boxed in—unable to cut without admitting failure. But the trigger is Trump. Not his politics. His instability. Why Monday: Trump’s legal exposure is converging with political escalation. Multiple sources point to a high-probability event—either indictment fallout, asset seizures, or a federal gag order violation—hitting between Sunday night and Monday morning. This isn’t just a news story. It’s a signal. The algos will see “instability at the top of U.S. political leadership” and sell risk instantly. Not because they care about Trump—but because they’re trained to react to volatility catalysts. Markets don’t wait. They front-run fear. You won’t even have time to log in. Positioning (My Book, Not Advice): 1. $SPY 4/15 495P — Loaded I don’t want the 500s. I want the break. If 495 goes, 480 is next. This is the breach point. 2. $VIX 16C, 17C, 18C — Laddered Strike Spread This is mispriced. VIX is at complacency levels. A 3-5 point spike is on the table within minutes of market open. 3. $QQQ 4/15 400P This is not just a hedge. It’s a structural bet. If tech unwinds, this is the drainpipe. Flows have been dangerously one-sided. 4. $TLT May Calls Flight to safety. Simple. You don’t fight Treasury demand during panic. I’m positioned for a snapback rally in bonds. 5. $HYG Puts High-yield credit is the truth serum. If HYG gaps down, it confirms contagion is spreading. Warning Signs to Watch Sunday Night ES futures gapping down below 5150 Yen strength Gold pushing $2,400 Crypto pump and fade Sharp reversal in Apple, NVIDIA, or MSFT premarket If those align, it’s happening. And it won’t be orderly. Conclusion: I’m not here to argue politics. I’m not here to scream “crash” for karma. I’ve been tracking this system for 12 years. The market is a living organism, and right now it’s twitching. If you're still dreaming about all-time highs, wake up. Trump is the spark. The system is the powder keg. Monday. Watch.

ApartPresent1908

I don’t care what CNBC says. I don’t care about earnings season optimism. I don’t care if Powell whispers dovish nonsense into the wind. The market is structurally vulnerable. And Trump just lit the fuse. The Setup The S&P 500 is levitating on zero-volume melt-up. Market breadth is collapsing—95% of gains are being driven by a handful of mega-cap names. Underneath? Rot. Small caps are flatlining, cyclicals are bleeding, and the bond market is screaming “danger.” Meanwhile: Geopolitical instability is growing in multiple hotspots. Bond yields are twitching like they smell blood. Consumer credit delinquencies are accelerating. And the Fed is boxed in—unable to cut without admitting failure. But the trigger is Trump. Not his politics. His instability. Why Monday Trump’s legal exposure is converging with political escalation. Multiple sources point to a high-probability event—either indictment fallout, asset seizures, or a federal gag order violation—hitting between Sunday night and Monday morning. This isn’t just a news story. It’s a signal. The algos will see “instability at the top of U.S. political leadership” and sell risk instantly. Not because they care about Trump—but because they’re trained to react to volatility catalysts. Markets don’t wait. They front-run fear. You won’t even have time to log in. Positioning (My Book, Not Advice) 1. $SPY 4/15 495P — Loaded I don’t want the 500s. I want the break. If 495 goes, 480 is next. This is the breach point. 2. $VIX 16C, 17C, 18C — Laddered Strike Spread This is mispriced. VIX is at complacency levels. A 3-5 point spike is on the table within minutes of market open. 3. $QQQ 4/15 400P This is not just a hedge. It’s a structural bet. If tech unwinds, this is the drainpipe. Flows have been dangerously one-sided. 4. $TLT May Calls Flight to safety. Simple. You don’t fight Treasury demand during panic. I’m positioned for a snapback rally in bonds. 5. $HYG Puts High-yield credit is the truth serum. If HYG gaps down, it confirms contagion is spreading. Warning Signs to Watch Sunday Night ES futures gapping down below 5150 Yen strength Gold pushing $2,400 Crypto pump and fade Sharp reversal in Apple, NVIDIA, or MSFT premarket If those align, it’s happening. And it won’t be orderly. Conclusion: I’m not here to argue politics. I’m not here to scream “crash” for karma. I’ve been tracking this system for 12 years. The market is a living organism, and right now it’s twitching. If you're still dreaming about all-time highs, wake up. Trump is the spark. The system is the powder keg. Monday. Watch.

OverEchidna

Oh you naive regard. The US is in a full blown trade war, the treasury bonds are tanking, and it’s very likely we’re in a recession.  The market is still in denial (and may go up short term) but at some point, people are going to wake up to the damage that’s done. Large wagers going down against the HYG (junk bonds), largest mortgage renewal denial since 2008, pretty clear what’s coming.

stockpreacher

That post was silly. There was no 'pump' on Friday. It was chopping sideways all day with a +1%\-1% then price laddered up gradually from afternoon to close. Absolutely low volume compared to the last week. VIX, HYG/SPY, MOVE, 10 Year yield all calmed down but stayed elevated. Gold and silver jumped on economy/stagflation fears. It was literally just shorts covering and wait and see repositioning. Buyers and sellers were both tired. No one makes big moves on Friday when a headline drop moves the market 10% in 15 minutes. Probably see a bear rally Monday or bear trap.

pmotiveforce

There is money to be made in intermediate term straddles, too. Check HYG and LQD. Also, of course, commodities.

hitandruntrader

why hasn't HYG tanked yet?

BagelsRTheHoleTruth

Puts on XLF, WFC, USB, CFG, HYG, and QQQ. Mostly June expirations. Shorter dated QQQ calls to hedge, and lots of cash to average down on pumps.

Rino-feroce

Gold still going up a lot, HYG still trending down. I think SPY will fizzle towards red today

kylestoned

HYG puts going to print

epyonxero

HYG back to 2023 prices

ChampionshipSome6184

It really depends on your risk tolerance. This market is wild. I have been doing 0DTE, 1-3DTEs and a few weeks out for SPX. For bonds, one way to play this is to keep around 40 percent in short-term Treasuries like SHY for safety, and put the other 60 percent into higher-yielding options like HYG and EMB to boost returns. It’s a barbell setup with steady income on one side and more aggressive growth potential on the other.

applerascal

do both 🙏 and have a tiny bit set aside for more puts on HYG / QQQ / SPY short term

Namechecksoutfine

The simple and short answer, global credit crunch. I find the spike in yields (no, it's not only China dumping US bonds) worldwide telling, the blown up credit spreads or the swift decline in HYG, LQD show the same thing. It's the time markets start to show cracks in unexpected places or where no-one is looking yet. While retail is still worrying about the next buyable dip, trading desks and other leveraged parties are scrambling to force close their least damaging trades. Sell bonds, "keep stocks, they might turn around soon" (and not taking a loss on these positions). These yield spikes appear often before big sell-offs for good reasons. We've seen this play out in similar ways before big market failures in 2000, 2008 and 2020, things are about to get a lot uglier the coming weeks.

pmotiveforce

So a while back my stock app told me I should buy HYG straddles for a few months out, they expire 5/16 at 80. I'm regarded so I barely even know what the fuck it is, but I'm up quite a bit on them. So it told me again a few days ago to buy 7/18 77's. Up on those too. Same with some LQD bullshit I don't know what the fuck it is. I'm a poster boy for a WSB regard who just willy nilly buys shit and sometimes it works out, usually it doesn't.

MutaliskGluon

Who is dumb enough to be bidding up HYG today lol

pmotiveforce

Oh, I'm mostly cash but I'm up on my GSK straddles, my HYG straddles, my TSLS calls, my LQD straddles. I'm mostly waiting for the crash to buy back in, but I did buy some 2 month HYG straddles. I'm up like 6K today. But should be way more.

dfddfsaadaafdssa

A lot of action on HYG puts, too.

Throwingitaway738393

I made around 4K on HYG puts And Vix calls. Not terrible. Hard when you see people posting such crazy numbers but I’m happy with it.

MutaliskGluon

TLT up huge and HYG down huge. Credit spreads are screaming caution

duboilburner

Well, the last time we had a quarter where the strikes were down at all from the previous quarter was Q4 2023. Before that? Q4 2022. Both quarters would end up being local bottoms in October. Of course, if we're just starting a real bear market, then this could just be the first quarter in a string of several that continue bracketing us lower. 2022 was 4 quarters in a row of JHEQX stair-stepping lower. Strong bullish move today so far. Interestingly, for how strong the up move is, VIX is holding strong at 22. We have contracted some since the open, but for how big of a move this is, I would have expected more vol getting pulled out. That's one thing that makes me think a little on the bearish side. But, a lot of other things are pointing to bullish for now. Divergence in VIX from its highs near 30 a few weeks ago, we have a lower high. $HYG and Bitcoin have seemingly found support here, and we got a double-bottom in SPX. A lot of things have the appearance of sellers having run out of steam, buy the dip mode may be back. Short term, I think we could have enough to keep going up. For how long is the harder question. A week or two? Most of the month? Not real sure. I do overall feel that this is the start of a longer bear market. We're possibly starting a solid bear market rally that will have more legs than what we've seen in recent weeks to the upside, but I'm not at all confident we get back to all time highs this year. But it's very tempting to be bulled up for the rest of the week, maybe next two weeks, or even all the way to the major April monthly expiries, we'll see. Up, for now, though--just adding fuel to my conviction that the official tariff news on the 2nd will be the market potentially rallying hard because while the market doesn't \*like\* tariffs, we've already priced them in, if not over-priced in that possibility. Adding some certainty back into the equation with solid details and deadlines on when things take effect can actually help bullish flows for the time being along with having a massive amount of bearish trades rolling off today. Markets and businesses don't like uncertainty. Even if it doesn't like tariffs, adding certainty back to the tariffs being enacted--knowing exactly what they will look like and when they take effect can actually be very bullish for a little while. So, while some people may assume the news is going to smack us back down, structurally it looks like the market almost won't have a choice but to go higher from here for at least a little while. Bears will need to tread carefully for a bit.

Reddit_Talent_Coach

HYG options are typically pretty cheap but the underlying moves (down) quick with the anticipation of a recession. (Zoom out to 2020 and 2022) Thing is that tariffs could cause a recession forcing Fed to cut rates raising bond prices so I have no clue how to play it.

MutaliskGluon

TLT up 1.5% and HYG down 0.3%. Probably nothing ;)

bobbo6969-

Puts on HYG oughta do it.

ai-moderator

# **TLDR** --- **Ticker:** SPY (implied) **Direction:** Likely Down (55% chance of red day) **Prognosis:** Short or Buy Puts (depending on risk tolerance). Consider HYG activity. **Methodology:** Contrarian sentiment analysis of a small Reddit poll (green majority suggests red day) combined with observed high put activity on HYG (junk bonds). **Disclaimer:** This is highly speculative and based on a limited sample size and somewhat unconventional analysis. Your mileage may vary, and you might lose money. Don't bet the farm on this.

sunburn74

Personally I'd get a job. You're 36 and 505K isnt enough to live on in retirement. I'd get a job, keep building a retirement portfolio and put the money in S&P500. If you want a higher bond rate, you could consider a diversified high risk bond etf such as HYG etf. You'd get more than with treasury builds and credit spreads are still pretty low right now.

AffectionateMaize523

❗️I ran an experiment—here’s the result❗️ https://preview.redd.it/t9pqsikzswoe1.jpeg?width=1320&format=pjpg&auto=webp&s=e5b43927ffe6ce73915c12a215f7a371468fa154 I asked everyone to guess whether Monday would be green or red. The idea was simple: if the majority predicts green, there’s a high probability of red, and vice versa. This was based on a contrarian approach—the market often moves against the crowd. Results from the poll: • Green: 37 votes • Red: 32 votes • 50/50: 5 votes What does this mean? At first glance, the split seems relatively even, but green had a slight majority. If we stick to the original theory, this would imply a higher probability of a red day on Monday. What’s the additional insight? A user pointed out an interesting angle—huge put activity on HYG (junk bonds) this week, which often precedes major market moves. If that’s the case, the market may already be pricing in a potential downside due to upcoming tariffs on April 2. If these tariffs turn out worse than expected, the downward pressure could be stronger than anticipated. Final probability estimate for Monday: • 55% chance of red (contrarian view + put activity on HYG) • 40% chance of green (market may still squeeze shorts before a deeper drop) • 5% chop (sideways movement) If the market does indeed go red, this could be another point in favor of using sentiment analysis as an early indicator. If it goes green, Murphy’s Law wins again. What do you think? Do you trust this method, or is it all just gambling disguised as analysis?

ai-moderator

# **TLDR** --- **Ticker:** SPY (implied) **Direction:** Down (55% probability) **Prognosis:** Contrarian Reddit poll suggests Monday will be red, supported by high put activity on HYG. However, there's a 40% chance of a green day due to potential short squeezes. **Methodology:** A Reddit poll predicting market direction, combined with analysis of HYG put option activity. **Disclaimer:** This is highly speculative and should not be considered investment advice. It's based on a contrarian approach and interpretation of HYG activity. Gambling disguised as analysis? You decide.

OverEchidna

There's a lot that goes in to the Algos, and there's also competing algos. You'll usually see movement in the options market before a big move in the market. This week, there was huge movement on HYG, the junk bond Vanguard fund, something like 35M in puts, Usually, that precedes a giant move in the market. I'd say the market is predicting that Tarriffs go through on April 2, and they're worse then people think. I do have open positions on HYG for May 16, 2025, P 79. I may open more, depending on what I see.

MutaliskGluon

HYG chart is now really bearish and Junk Yields are going up while long term yields are going down. For those who dont know what that means: People are selling high yield junk debt and buying low yielding safe debt. IE, look out below

hogryder

$SPY $QQQ I'm loading some $JEPI $JEPQ $HYG on the sell off. $MAGS Mag7 stocks will get a short squeeze soon. Tariffs are a way to get rates down, benefit everyone.

cryptohorn

Junk debt isn't falling yet like HYG so not the REAL crash

pmotiveforce

So some trade talk, mainly to mock bols. I'm cautious so I bought some straddles not long ago. SONY 4/4 @25 Strad - P side up 185%, C side down 28% HYG 5/16 @80 Strad - (didn't expect much, this seems to never move) P up 70% C down 30% JNPR .. it's not moving for shit, so sad there. GSK 5/16 @38 Strad - C side up 160% P down 36% DBX put side... doing decent hoping for more of a shit from them.

k3t4mine

Liquidity will be abysmal in the futures market today, expect massive volatility. The speed at which this market is deteriorating makes me think this is more than a correction. Also, HYG is now starting to sell off. Credit spreads are widening, finally. How far they go, and how quickly is key.

BagelsRTheHoleTruth

Futures sure are pointing to that. Pre market tomorrow will be very telling. I haven't been holding anything overnight, save for some OTM puts on HYG, expiring in April. But if we break the 200sma, look out below.

Reddit_Talent_Coach

I can’t post images but look at HYG options chain $80 strike.

Reddit_Talent_Coach

Somebody spent 30k on on June HYG calls recently. They’re betting on rate cuts.

Reddit_Talent_Coach

June 20 HYG $80 strike calls?

Alternative-Bag-7442

I started options trading like a month ago and my first option was a bust I bought 2 contracts for SLB at $45 eat it was like 2 weeks out but the break even i was only like 1.50 from it and it bottomed out on me I screwed up lol. Spent way to much, now I'm learning to look for cheaper ones that have a longer date than the first one. I have option in three things SLB HYG and AT&T. Hyg and AT are 3/21 calls and SLB is Friday. What makes me sick is my first buy was up between nividia or SLB. I choose SLB if I would a choose nividia I would a made like 3200 bucks on 80 bucks that's why options rule but are risky I like though how you can only lose a certain amount it's like betting lol

duboilburner

I stopped trying to use 'fundamentals' and news for short term trades some time ago. I get wrecked almost every time I use such an assumption instead of just trading what I see in front of me. These days, I trade SPX options based on dealer GEX, what the VIX is doing and what $HYG is doing (high yield corporate bonds). You'd be surprised, even on an intraday level, what those 3 things can tell you. The news can make a temporary panicked move, but if it starts to challenge a large wad of dealer GEX/hedging, expect that to be where things may turn around. Large GEX can act as both a magnet and a point of support or resistance. When a move gets pretty extreme, expect a hard reversal at some point, possibly the next day, especially if the trends in VIX and HYG support that. Nowadays, I just trade what I see, when the market makes a big move, I'll do my best to trade what I see in front of me and worry about what caused the move later. Instead of using the news as predictor of where the market is going, I use the market's movement to tell me some pertinent news came out. The market will digest the news and normalize after awhile, the news becoming somewhat forgotten. I'll take a cursory glance at what the news was that caused it, but it is not something to dwell on. What does the market tell you it wants to do? That's more important than what you think about the implications of that particular bit of news.

waitinonit

I'm retired and currently have a 40/60 (stocks/fixed income) portfolio. The fixed income side is giving me just under a 5% YTM from a bond ladder that goes out about 11 years. I replenish the rungs with bonds (including treasuries) that are about 11 years out. So at this point getting close to 5% return on the new rungs isn't much of a problem with a investment grade (including BBB/Baa). I also have some HYG. The long term total return on HYG is about 4.7%, that assumes reinvestment of dividends. That leaves the stocks to pull the overall return above 5%. So far it's been doing nicely. I primarily have SPY, QQQ, FTEC DIA, ITOT, XLC, XLB, and like everyone else, some NVDA. The interest payments are sufficient for me, at least for now, so I'm counting on those to get me through and corrections or crashes in stocks. I rebalance every 3-6 months. This lets me take some earnings off the table an put them in fixed income. That's the minimal risk portfolio that I came up with to get a 5+ % return.

k3t4mine

Watch HYG. If money starts pulling out of high yield bonds, the party is over.

MrCockingFinally

Can check out JNK and HYG

LarryStink

Credit not looking good, HYG down 0.4% in pre market. Through my backtesting the s&p never rallies on a falling credit market. If this trend continues in HYG I think its safe to assume the SPY move was just a bounce and it will fade. Too early to tell, but im sure by tonight after fomc and ER from tech we will know where this market is headed.

LegMission8192

Your current holdings of TLTS offer long-term Treasury yields, MUNI offers tax advantages, and iBonds protect against inflation. Consider supplementing medium-term bonds (such as IEFs) to smooth out duration risk. If you have a higher risk tolerance, you can add some high-yield bonds (such as HYG). Depending on your goals and liquidity needs, short-term bonds (such as SHY) or cash equivalents (such as BIL) may be useful additions

kiwimancy

Those three funds have positive five year returns: https://stockcharts.com/freecharts/perf.php?BIL,BND,HYG,MUB&l=3082&r=4340 You are probably looking at prices only, not total returns. Remember that price and yield are inversely related. Say I'll give you $100 in five years if you pay X today (a five-year zero-coupon bond). If you you buy it for $80, that's a yield of `(100/80)^(1/5) - 1 = ` 4.56%. If you buy it for $70 (lower), that's a yield of `(100/70)^(1/5) - 1 = ` 7.39% (higher). Either way you'll get $100 back at the end of five years, but its value today depends on what yields other people in the market would require in order to buy it from you. Yields are higher than they were five years ago, so bonds with maturity greater than five years have fallen in price in order to increase in yield. Yields were only ~1.7% in Dec 2019.

Background-Dentist89

Going to be hard to get intelligent conversations here. But here is my take on your question as well as some other consideration. During a market correction or drawdown, the performance of different asset classes varies based on the nature of the correction, interest rate environment, and economic backdrop. Here’s how some common options—utility ETFs, real estate ETFs, and bonds—typically behave and which provide better protection: 1. Utility ETFs Performance During Drawdowns: Utility ETFs (e.g., XLU - Utilities Select Sector SPDR) are considered defensive due to their stable cash flows and essential services (electricity, water, etc.). Advantages: Generally less volatile than the broader market. Dividend-paying, providing income during periods of uncertainty. Drawbacks: May still decline during corrections, especially if interest rates rise, as utilities are sensitive to bond yields. Effectiveness: Moderate protection. Utilities tend to outperform during corrections but may lag if the selloff is due to rising interest rates. 2. Real Estate ETFs Performance During Drawdowns: Real estate ETFs (e.g., VNQ - Vanguard Real Estate ETF) are less consistent in providing protection because their performance is tied to economic conditions and interest rates. Advantages: Real estate often serves as a hedge against inflation in a low-rate environment. Provides income through REIT dividends. Drawbacks: Sensitive to rising interest rates, as higher borrowing costs hurt real estate profits. Can underperform in recessions or economic downturns. Effectiveness: Low-to-moderate protection. Real estate ETFs may not perform well if the correction is driven by recession fears or rising rates. 3. Bonds Bonds are traditionally seen as a safe haven during market corrections, but their effectiveness depends on the type of bonds and the interest rate environment. Treasury Bonds: Long-Term Bonds (e.g., TLT - iShares 20+ Year Treasury Bond ETF): Provide strong protection during equity market selloffs, especially if rates fall as investors seek safety. Highly sensitive to interest rate changes. Short-Term Bonds (e.g., SHY - iShares 1-3 Year Treasury Bond ETF): Provide more stability during rate changes but offer lower returns. Good for preserving capital during volatile periods. Corporate Bonds: Investment-Grade Bonds (e.g., LQD - iShares Investment Grade Corporate Bond ETF): Provide moderate protection but can be affected by credit risk in severe downturns. High-Yield Bonds (e.g., HYG - iShares High Yield Corporate Bond ETF): Poor protection during corrections due to higher default risk. Effectiveness: Treasury bonds (particularly long-term) offer the best protection during corrections, especially when interest rates are declining. Conclusion: Best for Protection 1. Treasury Bonds (Long-Term): Historically the most reliable hedge during equity market corrections. Best choice if the correction coincides with falling interest rates or economic uncertainty. 2. Utility ETFs: Defensive but may be less effective if corrections are caused by rising rates. 3. Real Estate ETFs: Provide moderate protection but are vulnerable in rate-driven corrections or economic I did not include gold ETFs but it provides pretty good protection. I realize this is beyond the scope of your questions. Just a sidebar.

LarryStink

Until credit spreads widen theres absolutely no reason to get short. When you see HYG tank, and the ICEBofA high yield spreads spike thats when you get worried and buy protection

Difficult_Zone6457

Just realized HYG went live in May of ‘07, aka crap bonds gained an ETF right before a market crash. Anyone got anything like that that’s been added recently that in 5 years will be a, “Yeah why didn’t we make the correlation of that being offered, and it being about the end of the ball game.”

PapaCharlie9

HYG is roughly on par with TLT. Most of the price action for the underlying wrt to bonds is in long bonds (TLT) and junk bonds (HYG), so that's why those are the top two. ex-US sovereign debt ought to be well represented also (IGOV), but I haven't found one with good options volume.

k3t4mine

12 hours ago I would've called you delusional, but after seeing the market just not give a fuck about the stagflationary prints yesterday in initial claims and CPI, I don't think anything slows this market down. Except a credit event, which is why I have long dated puts on HYG. The only scenario in which this market tanks is a blowout in credit spreads.

Snorkx

Can you explain "HYG is hiatorically really good at setting series of lower highs" like I am 5 ? That's a serious question, I am sincerely trying to understand.

duboilburner

History has shown rate cuts after hitting the terminal rate for am extended period of time is usually a sign that the ged has recognized significant economic slowing due to the rate cuts, which means the economy and stocks are on borrowed time. But, I'm seeing enough for now to remain bullish, but for sure is time to be on your toes as we could absolutely be much closer to the top of the market than the next bottom. We are starting a new trend of higher lows and higher highs in volatility, which is usually a big warning sign that the top is nigh. But the one thing I also like to use as a leading indicator is high yield corporate bonds $HYG (or $JNK--but HYG has more volume). HYG is hiatorically really good at setting series of lower highs before stocks top out for a period of time. It's not doing that yet. Unusual that VIX is showing a sort of warning but HYG is not. I'm going to ride with the BTFD crowd for the time being, though... until HYG or something else shows me things really are taking a turn for the worse in the economy and stocks. Initial jobless claims are still within the low range. I expect a spike next week due to hurricane Helene, possible that rattles the market for a little bit, but as that normalizes some again, it will be party on into the end of the year. We'll see what we have at that point. I'm expecting closer to $6,055 SPX EOY. We'll see if that proves to be the top or not, see what the trend in jobs data looks like at that time, as well as if HYG has then started to show bearish divergences.

MONGSTRADAMUS

high yeild is going to normally have lower credit quality bonds so that is why you are getting higher yields. Something like HYG , has only BB and below. JNK is roughly the same. SGOV/USFR/TFLO are all Treasury notes/bills I would feel much more comfortable with them if memory is correct they are all AA and above, they are all state tax exempt. Also what are these bonds supposed to be used for e-fund, cash holdings, goal for something else , etc?

Londonskaya1828

I hold bond ETFs throughout the entire rate cycle as part of my overall investment strategy. As you can imagine, it hasn't worked out very well, but no massive losses or fund liquidations. So, this is a bad strategy, but it does provide some security and dividends. I don't hold individual bonds as an ETF allows me to spread the risk across many companies or countries/municipalities. US Treasuries are the sole exception as a US government default is unlikely and perhaps impossible. I also hold bank CDs. I hold bond ETFs like PZA LQD NMZ PICB HYG

---Right--Tackle---

KRE: topped. Double top. IWM: topped. Double top. HYG: on its way to sub 70. SPY 450 EOY.

---Right--Tackle---

Need HYG at bout 70 

Omahut

Could be right. The options flow nerds I've listened to have said to expect a decent amount of uncertainty/choppiness through into the election, but after that, buckle up. It does bear saying that normally rate cuts are an indication that the federal reserve has recognized that the hike cycle has finally started showing adequate slowing in the economy to justify the start of cutting. These cycles take substantial time to play out for the effects to truly be felt through the economy, both in terms of lowering rates and raising rates. More often than not, especially with a BIG hike like we just went through, it increases the likelihood of a bigger fall. There's been a small uptick in unemployment %, but initial jobless claims aren't showing a substantial up move yet. This morning's number was lower than expected and on the low side of normal, even, which bodes well for the economy. Non-farm payrolls have been steadily dropping from the peak of re-hiring post COVID, but even though we're near the lowest NFPA since COVID, the number is within the average range of 2010-2019... It has not yet had a monthly report come close to 0 or below. Hiring has slowed, but the fed says their feel is that there are not impending lay offs that are about to occur. Maybe we do get a slight uptick in unemployment in the next year, but they aren't expecting anything drastic. Maybe the mythical 'soft landing' does infact happen. Just keep an eye on those numbers. Also, a great product that often shows a series of lower highs prior to the major stock indices hitting their all time highs for the cycle is $HYG. High yield corporate bonds ETF. $HYG has recently continued to set new highs from the sell-off that happened in 2022. It's not showing any bearishness at all yet. So yes, I would argue that for the remainder of the year at a minimum, stocks keep going up. But, the rate cut segment of a cycle needs to be treaded through carefully, because historically the economy does tend to have a bigger downturn that ultimately causes a prolonged stock bear market of a year or more. My advice is to be on your toes and keep watching non-farm payrolls and initial jobless claims at a minimum. Initial jobless claims are nice because we get those numbers every week. Total unemployment % and the non-farm payrolls are once a month numbers. You will absolutely see a big upwards divergence in initial jobless claims well before the rest of the numbers start to move in a worsening direction significantly. For now, the market is assuming the soft landing is on the table, but it can't be absolutely certain about it. The data they all rely on is "so far, so good." So yeah, let's keep rolling with the bulls for now. Just be vigilant because we're at that time where it can suddenly be the start of a bear market if significant worsening of the economy starts to show up in those numbers.

GrndskperWillie

$HYG is still decently priced, might be a decent way to play it.

LarryStink

Agreed. Same with corporate credit HYG. It seems fishy, and unlikely to hold. Nvda accounted for 40% of the gains according to terminals.

JohnColtraneIsOkay

I am a bit risk averse, trying to build a portfolio with low but steady returns. Any feedback? VETY 35% HYG 25% DHS 15% MINT 5% PAVE 7% VRP 3% ARKK 5% EEM 5%

LarryStink

Bond spreads going to blow out this winter and HYG with it

LarryStink

HYG 75 put leaps

LarryStink

HYG bond index did provide much support for the bull case today. Weakness in corporate credit tend to bleed over into equity weakness.

PapaCharlie9

I had to look up what JAAA was. Do you understand the CLO market? Because I sure don't. Do you have any idea what the *real* credit worthiness of the CLO portfolio is? Just because it has AAA in the name doesn't mean they are actually AAA, as we learned in 2008. All I can say is that for the more typically traded interest-rate option plays, like TLT and HYG, the Sep rate cut is already priced in. So unless there is something mechanical about JAAA that somehow prevents that ancipatory pricing from happening, you're probably too late.

LarryStink

Apparently so are the rest of the employment data with all their revisions. Bottom line is the labor market is definitely softening, and coming into the worst seasonal time of the year its very probable it gets much worse. (Not trying to be a doomer, but thats the trend, both current and historical.)  Commodities markets are also showing lack of demand, further supporting this thesis. Even with OPEC cuts, and geopolitical tensions, and supply constraints due to shipping. In my opinion oil is the bellweather for the economy and its not a rosy picture. Copper could be said as the same.  Real estate market also softening, with the majority of the listings on the market for months, and price cuts after price cuts. Even as rates are coming down, which one would think would spark some buyers.  I could go on, but there are a lot of headwinds stacking up. I dont think its the end of the world, and a mild recession is honestly the healthiest thing for this economy. With that, high yield corporate bonds are probably going to faulter at some point and HYG goes with it. 

Alans_Briefcase

If credit spreads widen, it'll be most likely from falling risk-free rates. In which case HYG will go up. Unless you think Fed isn't going to cut.

LarryStink

Credit spreads about to blow up in the next 3 months. HYG is priced to do nothing with a 6 month IV of 7% and ±5$ implied move. Just for funsies im going to buy a few dec/march puts 

Omahut

I actually have VIX and $HYG (high yield corporate bonds) overlaid on an $SPX chart. You'd be surprised at how often you get a leading divergence from both prior to a reversal move in $SPX. In longer term trading (looking at a weekly chart, for example) you often see a couple lower highs in $HYG and at least one higher low and higher high in VIX from a local low before a longer term bear market sets in. You can zoom into the 5 minute chart and you'll often get something similar on that scale for intraday reversals. Having them both overlaid on a full frame chart helps see the smaller movements in VIX and HYG. Magnifying them like that helps you see these leading divergences. Like using technical analysis, they aren't going to he perfect/right every time, but they are pretty damn good. And VIX is just a calculation of what the SPX options market is doing. So it really is a helpful tool, especially since there is a strong inverse correlation between VIX movements and SPX price.

Middle_Bumblebee_343

Literally what Iv been doing but without the options part. Loading up on TLT TMF a bit of HYG

big_deal

I think both BEMB and EMB invest in USD denominated bonds so they should not have currency risk exposure. LEMB invest in local currency and does have currency risk. Both EMB and HYG have higher correlation to US equity than investment grade corp or treasury bonds. It's on the order of 0.6-0.7 for both depending on the time period. If you want to see extended historical data look at PREMX for EM bond history back to 1994, VWEHX or FAHYX for high yield bond history back to 1980, and VWESX or VFICX for investment grade corp bond back to 1980.

Fine-Can-2876

HYG options are kinda dumb. But the rare chance HYG swings. You get insane returns.

Dstein99

The answer for lowest risk way to get T Bills + 2% is junk bonds. HYG for example has a 30 day yield of 7.03% which is essentially T Bills + 2%. The added risk isn’t worth the extra yield to me and I would rather stick with something like SGOV because if I’m in bonds it’s for safety. Essentially what he wants to do is increase his return, while keeping his risk low, without using risk management tools in options. There are ways that you can get T Bills + 2% but it doesn’t sound like he wants to use those ways and he wants to reinvent the wheel. The people who try to outthink their friend normally try to get just a little more return, don’t realize how much risk they are taking, and get themselves into trouble.

LarryStink

Ratio charts and comparative analysis is the best T/A a trader can use.  My favorites are - TLT/HYG - DJI/GOLD - VIX, VOLI, SKEW, VVIX all on a secondary pane with SPX/SPY/QQQ/NDX

makken

Hmm, imo for most diverse reach, you'd want exposure to different asset classes, so one ETF for stocks, bonds, and commodities, for the 4th, I was originally thinking cypto, but personally, I would be more interested in exposure to PE or HFs. So, personally, I would go something along the lines of VT (stock), BND (bonds), PDBC (commodities), PSP (PE) You'd want to dig in deeper to their holdings to minimize overlap/correlation, and/or sub in something different for VT if you want more tech exposure (QQQ maybe), and BND if you want more yield (HYG maybe).

Open_Substance5833

I did this a lot as a bond trader on the street, and I'd recommend much great caution. Borrow is unstable, transaction costs very high (unless you are talking about USTs), and you will be subject to margin most likely (as oppose to repo as professionals access). If you want to be short bonds, I'd just short bond ETFs - TLT, AGG, IEF, LQD, HYG etc.

PapaCharlie9

> Does anyone use $TLT to determine what direction they think stocks will go? No. Why would 20-year treasuries tell you the direction of the stock market? I use TLT to make interest rate plays (though HYG is arguably better for that) and to diversify portfolios that are too equity heavy. > VIX went down while TLT went up. Wtf I now feel dumber. Why does that make you feel dumb? The market has been waiting for a Fed Funds rate cut all year. It finally looks like its going to happen in September, so bonds (TLT) are rising in anticipation. Equities had also been rising (thus the decline in VIX), though earlier and in much more speculative anticipation, but this week was a bad week for Tech earnings, so when AMZN sneezed, the whole market caught a cold, as the saying goes. Nothing surprising about what has happened over the last week. FWIW, neither VIX nor TLT can tell you the direction that stocks will go in the future. Nothing can do that.

ChangeUserNameOMG

Please don’t think. Just say what you have as facts bro. Fuck me. I’m saying this for your own sake. Stick to solid reasoning. “I think” u think we all think. Why should I use a smaller time window? HYG so you know it’s just that you are disliking the fact I’m zoomed out. Using the same time frame I’m sure this now looks more convincing to you: https://preview.redd.it/z7hbns6m5ggd1.jpeg?width=1170&format=pjpg&auto=webp&s=acf2418a79539b3ff36c0f3914ee787f998ddd49