TBT Options Trading — Covered Calls, Puts & the Wheel
A complete guide to selling options on ProShares UltraShort 20+ Year Treasury. Expected premiums, strike selection, real example trades, and the four strategies that actually work for TBT.
Why trade options on TBT?
TBT (ProShares UltraShort 20+ Year Treasury) is one of the most heavily traded ETFs for options strategies. Tight spreads and good open interest across strikes make it ideal for premium sellers. Because TBT is a basket rather than a single name, single-stock earnings risk is diffused, which is a meaningful edge for consistent income.
Typical monthly premium collected on TBT runs around 2.0-3.5% of capital, which annualizes to roughly 24-42% if you sell new contracts every cycle. Capital required to run a single contract wheel on TBT is under $5,000 — the share price and the 100-share lot size set the minimum, not the strategy.
Four strategies that work on TBT
TBT Covered Call
Sell upside calls against 100 shares you already own to collect premium every month while capping your upside.
Read the TBT Covered Call guide →TBT Cash-Secured Put
Sell a put backed by cash so you either get paid to wait or acquire the stock at a discount to today's price.
Read the TBT Cash-Secured Put guide →TBT Wheel
Alternate between cash-secured puts and covered calls on the same ticker to generate continuous premium income.
Read the TBT Wheel guide →TBT Poor Man's Covered Call
Replace the 100 shares with a long-dated deep-ITM LEAPS call and sell short-dated calls against it to reduce capital.
Read the TBT Poor Man's Covered Call guide →TBT options FAQ
What is the best strike price for a TBT covered call?
On TBT, target 8-12% out of the money at 0.15-0.25 delta. On a high-volatility stock like this, closer-to-the-money strikes chase premium but spike assignment probability to uncomfortable levels.
How much premium can I collect selling calls on TBT?
Typical monthly premium on TBT is 2.0-3.5% of position value, annualizing to 24-42% when you roll every cycle. Earnings months can pay 2-3x the normal rate because of elevated IV.
What is the best delta for a TBT cash-secured put?
A delta of 0.15-0.25 on TBT balances premium income with assignment probability. Many traders anchor to 0.20 delta as a starting point and adjust based on their willingness to own shares.
How much cash do I need to sell a put on TBT?
Cash required is 100 × strike price. For TBT, that's roughly under $5,000 per contract at a typical strike. Most brokers let you use margin, but for a true cash-secured put you set aside the full amount.
Is TBT a good stock for the wheel strategy?
TBT is solid for the wheel because of its reasonable spreads and elevated IV (high premium, higher assignment risk). No dividend means all your return comes from premiums and price appreciation.
Can you run a poor man's covered call on TBT?
Yes. Buy a 0.80+ delta LEAPS on TBT dated 12-18 months out as your synthetic long, then sell short-dated calls 8-12% above the stock at 0.15-0.25 delta. Capital tied up drops from under $5,000 to roughly 30-50% of that — a meaningful improvement when the share price is a low share price.
What expiration should I use for TBT options strategy trades?
Use 21-35 DTE to capture IV without excess gamma risk as a default for TBT. This window captures the steepest part of the theta curve without excess gamma risk.
Is TBT suitable for beginners selling options?
Not ideal for beginners. Smaller-cap names can have wider spreads and sharper moves. Start with large caps or major ETFs first. Always check the bid/ask spread before entering — anything wider than 5% of the mid price is a warning sign.
Run the numbers on TBT yourself
Use the free OptionsPilot calculator to price covered calls and cash-secured puts on TBT with live quotes.
Open the TBT Strike Finder →