10-Year Yield at 2.6%? Market's Abuzz Over Huge Options Wagers
- Bets costing premiums of over $75 million emerged this week
- Next test comes with Wednesday’s Federal Reserve decision
Photographer: Julia Schmalz/Bloomberg
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Hours before a crucial Federal Reserve decision, a bullish trade is gaining momentum in the market for options on Treasury futures.
Over the first three days of this week, traders paid more than $75 million combined to buy almost 200,000 call options on 10-year futures. Coming just weeks after 10-year yields set an almost seven-year high above 3 percent, the bets amount to a bold call targeting a drop to as low as about 2.6 percent before the biggest chunk of the contracts expire Aug. 24.