US Treasury options traders are shifting bullish on longer-dated bonds, with call premiums at their highest since March as 10Y yields fall below 5.00% for the first time since late September.
Macro & Markets ·
US Treasury options traders have shifted decisively bullish on longer-dated bonds, with call premiums reaching approximately 50 basis points above put premiums—the highest differential since March 2025. This represents a dramatic reversal from late September, when put premiums commanded a 250-basis-point advantage, signaling a fundamental shift in investor positioning toward Treasury price appreciation.
The positioning shift reflects concrete bets on further yield declines. One notable options trade targets a 10-year note yield of approximately 4.60% within a month, involving roughly 65,000 contracts and requiring approximately $7 million in premium. The 10-year yield has already fallen below 5.00% for the first time since late September, down 40 basis points from its October 7th peak, providing some validation to the bullish thesis driving the options market.
What remains unclear is whether this sentiment reflects expectations of monetary easing, economic weakness, or technical mean reversion in the bond market. The scale of the directional shift—from heavily put-skewed to notably call-skewed in weeks—suggests a significant repricing of near-term Treasury trajectories, though the underlying driver of this conviction shift is not specified in available data.