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Bet on a rise in US long rates with a turbo put.

By winning the senatorial elections in Georgia, the new Democratic president is expected to launch a massive stimulus package that could worsen the deficit, boost growth and raise interest rates in the long run. The movement can be played by means of a turbo put.

Against the backdrop of an inadmissible insurrection by supporters of the ousted president, Democrat Joe Biden will be inducted into the White House on January 20 with full powers (majority in Congress) and will therefore be able to roll out his electoral program, focusing in particular on infrastructure and the transition energetic. A new stimulus package much more massive than the $ 900 billion snatched from the Republicans at the end of last year should be announced quickly with the consequence of widening the US deficit even further but accelerating the resumption of growth. Enough to raise the yield on ten-year government bonds. The movement is already well underway from the lows of 0.5% since rates have just crossed the threshold of 1%. Even if the American central bank will seek to slow down the repentification of the curve by buying government bonds, their remuneration could rise to the 1.25-1.5% zone without the equity markets being affected. penalized.

8.9 times leverage

A turbo put issued by Societe Generale without maturity allows the trend to be anticipated, knowing that when rates rise, bond prices fall and vice versa. The certificate has a security threshold of $ 152.38 which must not be reached. Otherwise, the turbo will lose all of its value. It offers an attractive leverage of 8.9 times. Thus, assuming the bond price drops to $ 123 (it is worth $ 137.12), the put will appreciate by 91%. But be careful, because if the loan goes up to 150 dollars if the loan goes up, the turbo will lose 83% of its value.

Our advice: buy a turbo put issued by Société Générale (code: DE000CL2G1R1); level of financing and security: 152.38 dollars, parity: 1 certificate for 1 bond; price: 12.56 euros; portion: 1.

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