With this government bond, you can achieve a strong potential gain in a few weeks. The spread between the BTP and the Bund returns to Piazza Affari. The yield differential between Italian government bonds and German government bonds started to shrink again and to approach the 170 point threshold again. This opens up to excellent earning opportunities with Italian government bonds. In particular, with this government bond, a strong potential gain can be achieved in a few weeks. Below we show you how. With this government bond, you can achieve a strong potential gain in a few weeks
The drop in the spread is most likely due to the improvement in expectations for economic growth in Europe, for the second half of the year and 2021. Obviously, the drop in the yield spread has made interest in Italian government bonds return, which present excellent profit opportunities. . Just adopt strategies that aim to obtain capital gains.
In fact, the drop in the spread causes the prices of the multi-year Treasury Bills to rise. And the further away their maturity, the more sensitive prices are to the reduction of the differential.
Buy now the 30-year BTP, expiry September 2050 (Isin: IT0005398406), and then resell it in a few months, could prove to be a winning bet.
Strategy to earn with the thirty year BTP
Today the BTP is around 104 cents, 13 cents more than the minimum reached on April 21 around 91 cents. Share, however, still far from the highs of 112.6 cents reached on February 21, before the strong market decline.
You could buy the BTP today around 104 cents, betting that in the next few weeks it can return to 112 cents. At that point it could be resold. In monetary terms it would be a matter of investing 1040 euros for each BTP today. Arriving at 112 cents you could resell it and get 1120 euros with a profit of 80 gross for each BTP in the portfolio