Traders Make Bold $80M Bet on 10-Year Treasury Yield Drop to 4%

Traders have placed an $80 million wager on March Treasury options, anticipating a decline in 10-year yields to 4%. The 10-year Treasury recently peaked NEAR 4.20% before stabilizing, as investors digest economic data and Federal Reserve commentary on this year's three rate cuts.

CME data reveals aggressive buying in a single March options contract tied to the 10-year Treasury, with open interest surging 300% in a week to 171,153 contracts. This activity reflects new positions rather than rolled-forward trades, signaling strong conviction in the downward yield movement.

Despite Monday's slight yield increase to 4.16% following a successful $69 billion two-year note auction, the market continues to show appetite for short-dated U.S. debt. A separate $28 million March options position targeting 4.05% yields emerged simultaneously, reinforcing the bearish yield outlook.