Trader Bets Big on 10-Year Treasury Yield to Reach 4% Again in a Matter of Weeks

BlockBeats News, December 23, Traders are heavily buying Treasury bond options, betting that the U.S. 10-year Treasury yield will rise to 4% in the coming weeks— a level not seen since late November last year. This bullish bet comes as Treasury yields have actually edged up recently, with the 10-year yield touching a high near 4.20% earlier this month before fluctuating to 4.16% on Monday as investors weigh the latest economic data and look for clues on the timing and extent of future rate cuts from Fed officials.

Unfilled contract data released on Monday by the Chicago Mercantile Exchange (CME) showed a surge in the buying of March-dated 10-year Treasury bond option contracts over the past week. The total premium paid for these positions has been unusually large, reaching around $80 million to date, with the number of open positions soaring to 171,153 contracts, a 300% increase in just one week. (Jinse)