Options open interest explodes as 10‑year yield rally back to 4% gains steam
The post Options open interest explodes as 10‑year yield rally back to 4% gains steam appeared on BitcoinEthereumNews.com.
Options trading surged across the U.S. Treasury market as traders positioned for a bond rally that could pull the 10‑year yield back to 4% in the coming weeks, a level that has not appeared since late November, according to data from the CME. Earlier this month, the 10‑year Treasury peaked near 4.20% before moving within a tight range. Investors spent recent sessions weighing incoming economic readings and reviewing comments from Federal Reserve officials during each of the three rate cuts that have happened this year. Traders pile into March contracts as open interest jumps CME figures released Monday showed aggressive buying in a single March options contract tied to the 10‑year Treasury. The total premium paid on that position reached about $80 million, a size rarely seen for one structure. Open interest climbed to 171,153 contracts, reflecting a 300% jump in one week. The rise showed new positions entering the market rather than existing trades being rolled forward. The wager landed even as yields moved higher on the day. Treasury yields finished Monday around two basis points higher across most maturities, pushing the 10‑year yield to about 4.16%. That move followed a $69 billion auction of two‑year notes, which drew solid demand and cleared without disruption. The pricing confirmed continued appetite for short‑dated U.S. government debt despite the rise in yields. Another trade surfaced during the same session. Traders paid a $28 million premium for a separate March options position aimed at a 10‑year yield near 4.05%. The structure sat close to the larger bet and shared the same expiration window. Both trades are set to expire on Feb. 20, after the Federal Reserve’s January policy meeting, allowing traders to express views on changes in rate expectations tied to that decision. Yields rise into auctions as volatility stays low Meanwhile,…
Filed under: News - @ December 22, 2025 9:24 pm