Bond Traders’ Big Bet Targets US 10-Year Back to 4% Within Weeks

Traders are loading up on Treasury options targeting a bond rally that would send US 10-year yields back to 4% in coming weeks, a level not seen since the end of November.

CME open interest data released Monday confirmed heavy buying in one March 10-year options contract over the past week. The total premium paid on the position so far is unusually large at approximately $80 million, and open interest, or new positioning held by traders, has soared to 171,153 options — a 300% rise in a week.