Popular Hedge-Fund Trade Seen Behind Treasury Futures Crowding
- Leveraged funds have increased short positions, CFTC data show
- Bank of America strategists suspect so-called basis trading
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Hedge funds betting on the spread between Treasury futures and the underlying securities are the prime suspect for a mounting short position in the futures.
Data released weekly by the Commodity Futures Trading Commission show that leveraged funds have large net short positions across several Treasury futures contracts, including a record short in the 10-year note.