To reinforce the warning at the end, the put/call ratio on HYG is currently 12 (!) Lots of money is betting on it falling in price.
The Fed is also not buying non-IG bonds (yet) so nobody will be supporting HYG/JNK in the way LQD will be. If they start buying those, HYG will soar. An oil price spike and recovery would help HYG too.
To be fair, I did make money on weekly HYG calls today, but that was a hedge ;) 4/9 76C from .50 to 1.18
The Fed is also not buying non-IG bonds (yet) so nobody will be supporting HYG/JNK in the way LQD will be. If they start buying those, HYG will soar. An oil price spike and recovery would help HYG too.
To be fair, I did make money on weekly HYG calls today, but that was a hedge ;) 4/9 76C from .50 to 1.18