Business & Finance
Traders make heavy bullish bets on long-term bonds following yield highs
Options activity in the iShares 20+Year Treasury Bond ETF shows increased volume in bullish call options as long-term bond yields reach multi-year peaks.
The short version
- Options traders bought over 175,000 call contracts in the iShares 20+Year Treasury Bond ETF (TLT) on Tuesday, compared to fewer than 40,000 put options.
- The heavy trading follows recent 19-year highs in 30-year Treasury yields, which spiked after Treasury Secretary Scott Bessent expanded government bond buybacks.
- The TLT ETF rose 0.9% to $83.30 on Tuesday, hitting its highest level since late July.
- Market participants are monitoring upcoming catalyst events this week, including the PCE inflation report, Nvidia earnings, and the Jackson Hole symposium.
Key facts
- Options traders purchased more than 175,000 call options in TLT on Tuesday, while put option volume remained under 40,000 contracts.[CNBC]
- One notable trade involved a $1 million purchase of 10,000 TLT November call options at an 85 strike price, partially offset by selling 15,000 calls at a 90 strike price for $375,000.[CNBC]
- The 30-year Treasury yield reached 19-year highs prior to the increased option activity.[CNBC]
- The TLT ETF rose 0.9 percent to close at $83.30 on Tuesday, while the iShares iBoxx $ Investment Grade Corporate Bond ETF gained 0.5 percent.[CNBC]
What remains uncertain
- Whether the recent increase in call option volume indicates a permanent end to the long-duration bond yield surge remains unknown.[CNBC]