Mystery Treasury-Options Trader Bags $10 Million on Jobs Report
- Last-minute purchase of puts early Friday anticipated selloff
- Options’ value soars with 10-year yield on strong data
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Friday’s stellar U.S. jobs report made at least one bond trader’s weekend a lot sweeter, to the tune of $10 million. That’s how much an opportunistic options player made on a single trade as Treasury yields soared.
The buyer of put options on 10-year futures ponied up almost $2.5 million for the bearish bet, with the note’s yield at about 2.88 percent. For it to make money, yields needed to reach 2.90 percent by the end of the day. As it turned out, the report’s bigger-than-expected increase in average hourly earnings propelled the 10-year yield to almost 2.95 percent, resulting in a tidy 500 percent profit on the trade.