Infinity Advisors : Treasury Trading Program

Summary

Infinity Advisors, LLC is in the business of providing trading advisory services to clients with respect to futures contracts and options on futures contracts. Infinity Advisors utilizes a combination of technical and fundamental analysis in its trading methodology. It primarily trades both futures and options in the interest rate sector of the U.S. commodity futures markets. However, it may trade any futures contracts that fit its profit objectives and risk parameters.

Investment Strategy

The Treasury Trading Program seeks to profit from the fundamental view that U.S. Treasury prices are unusually high. (Yields, inverse to prices, are artificially low.) We project significantly higher rates on U.S. Treasuries, independent of inflation. Under normal inflation levels of 2-3% per year, we believe there is a high probability of a 10-year yield of 5-6% and a 30-year yield in excess of 6%. If problematic inflation develops, yields may rise much higher. The strategy is implemented through active, opportunistic and tactical short-biased trading of interest rate contracts including T-Bond, 10-Year Note, Ultra T-Bond and Eurodollar futures and options on futures. Why an active, tactical trading approach as opposed to simply buying puts or a long term passive short position? Although we are bearish on bonds long-term (bullish on rates), timing is difficult to predict. Rates may remain low for an extended period of time (puts could expire worthless) and Treasuries may rally from time to time due to geopolitical events.