Jeffrey Gundlach, CEO of DoubleLine Capital, said at Sohn Investment Conference that his best idea for investors is to buy interest-rate volatility on bonds with long maturities.
Gundlach, known on Wall Street as the Bond King, said the US interest rates "can not sustain the low volatility" they have been experiencing over the past eight years, and it is no inconceivable that it could double.
Investors can practice this bet through put and call options on the same strike or sale, price, he said. Put options give investors the ability to buy while call allows them to sell.
Gundlach has recommended using the iShares 20+ Year Treasury Bond ETF for the deal. "I think it's an excellent time for this move and a very important environment where outcomes are so binary," he said.
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