Bond Trader Bets $10 Million That Volatility Revival Is Imminent
- Strangle position in options market has unlimited upside
- Profit would come from price swings on Yellen, inflation, ECB
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Volatility in the bond market is about to stage a comeback.
At least that’s what one trader is betting, judging by options-market activity signaling a conviction that Treasuries will either win big or fall hard in the next two weeks. The success of the wager, which involves an unusually large amount of money for an options strategy of this kind, isn’t tied to the direction of yields. Rather, it depends on the return of the kind of turbulence that hasn’t been seen in months.