STOCKS | Traders Buy Options to Hedge Higher U.S. Long-Term Treasury Yields

According to Wallstreetcn, U.S. benchmark long-term Treasury yields are at or near multi-year highs as inflation worries and swelling deficits weigh on the market, and traders are buying options to hedge against further gains, including a large position betting that 30-year yields will rise sharply. Dealers on the other side of those options trades must actively hedge their own risk, typically by selling futures or entering swap contracts, which may push swap rates higher and amplify market volatility as yields rise.