How to profit from interest rate changes in the short term

(This is a little late, but what the hey...)

If one thinks interest rates will go up (that is, falling bond prices), one can buy puts or sell calls on TLT ($86.71 on 4/3/2004), the iShares Lehman 20+ Treasury Fund. This exchange-traded fund tends to track the 10-year Treasury note (check iShares for more information).

Conversely, if one thinks yields will go down (rising bond prices), one can buy calls or sell puts on TLT, or even buy TLT itself.

Buying options is generally safer than selling them (short). Suppose someone had sold puts believing that there would be a bad job report (meaning the economic recovery would not be soon and consequently, the interest rates would stay low longer). The job report was good (meaning the economic recovery is likely to make interest rates go up sooner) and that person would be forced to cover his short put by buying TLT at a higher price (at a loss).

TLT $86.71 on 4/3/2004

Long Range Acoustic Devices

The LRAD is a less-than-lethal directional acoustic gun that sends a beam of high-decibel tone that can be used to deny areas, control crowds and keep away potential threats.

On late February, American Technology Corporation (ATCO, $5.95 on 4/1/2004) has got a $1 million contract with the US Marine Corps to deliver LRADs. That is only a tiny part of the Congress $335 million allocation (in a flood of $87 billion earmarked to defense).

ATCO $5.95 on 4/1/2004

Traders and tax software

If you are filing your taxes using one of those softwares (Turbo Tax, Tax Cut, etc) and you think you need to type every single trade into the form, there is a better way.

If you have Quicken or Microsoft Money, it is likely that you can download all your transactions from your broker and save them in an TXF file.

The TXF file can then be read by your tax software and all your transactions will show up. You still have to enter the information from the 1099 forms you have received for dividends, interest and other income.