NOB and CTD

This is our custom made graph showing the current Cheapest to Deliever (CTD) 30 year yield vs 10 year yield as it relates to the cash markets.

Though our CTD chart shows the NOB at 144, the spot future NOB (CME traded) is only at 134, this tracks the two spreads relationship to one another.

A weekly chart of the generic front NOB contracts dating back to September of 1992 along with the 50, 100 and 250 simple moving averages

The NOB continues to make multi-month year highs as the shorter end of curve sprints towards zero. I pulled up the generic front future NOB and asked my Bloomberg for the high, the low and the mean for the time frame 9/92 through today {10/8/10}. We're at the high, as in right now it is creating a new high water mark for the 18 year period. Historically speaking, we're 100 basis points over 'average'. I understand that we're in a new and "exciting" time but I have to think that some type of retacement is necessary. At a minimum, how can we structure a trade that allows us to risk limited premium and yet capture unlimited returns as we crash back towards normalcy?

~LH