Traders at work at the New York Stock Exchange on September 30, 2026.
new york stock exchange
It may seem crazy to call the unstoppable decline in U.S. Treasuries the bottom, but a small group of options traders seem to be getting more and more convinced.
transaction in iShares 20+ Years Government Bond ETF (TLT) According to data compiled from Cboe LiveVol and SpotGamma, call volume was extremely high on Wednesday, 50% above the 30-day average. Traders sold more puts than they bought, buying almost 370,000 calls versus less than 100,000 puts on TLT.
Nine of the top 10 traded ETFs were calls, and while there was some call selling, volume and premiums favored the bulls, suggesting traders don’t think the risk-reward of betting on high yields is high. A rise in TLT means a fall in interest rates.
Additionally, the most popular trade for TLT’s monthly October 30 expiry was to buy an 82-strike call. This is a 10-cent contract that has been traded about 16,000 times today, and will require long-term bonds to regain all the ground it has lost since September 22nd. During one of the worst parts of this year’s selloff, TLT fell 6% and the 30-year Treasury yield rose above 5.6%.
The bulk of the buying was from one active buyer as of 10:01 ET. The buyer spent at least $250,000 to purchase 25,00 of the 82 strike calls expiring on October 16th and 30th and 5,000 of the 80 strike calls expiring on October 30th. Although it wasn’t a huge deal, it was the largest purchase in the contract due at the end of the month, and came just before the 10-year bond auction that triggered a big rally in bonds.
iShares 20+ Years Government Bond ETF, (TLT)
“Ten’s made a bullet bid today. Auction demand is very strong,” Jim Perry, founder and chief investment officer of Perry International Capital Partners, said in a text. “Demand is strong. They said, ‘We want it, so we’ll execute a market order at the market price.'”
Another important test comes today with the 30-year bond auction at 1pm ET.
Wednesday’s TLT options flow followed unusually optimistic trading in the interest rate-sensitive utilities sector of late. On Friday, instead of the relentless put buying that has punctuated the XLU ETF’s options flow over the past month, trading was dominated by someone selling $1 million in puts, betting that the group’s decline would narrow or turn around.
The utility is up about 3% since then, and Wednesday’s XLU trading was marked by call selling, but little put buying. Of the $12 million in premium exchanged on the ETF, only $1 million resulted in calls.
“Yields could plateau,” Perry added. “But I want to own stocks. If yields fall, stocks will outperform bonds.”
