As bond rout worsens, a trade Wall Street uses to replace them booms in popularity

If the U.S. Treasury bond market has 99 problems, the surge in popularity of a particular type of options trade may be the one that gets talked about the least. The options strategy, commonly referred to as a "box spread," combines four options at two strike prices: one bullish call spread and one bearish put spread — mostly on the S&P 500 Index — to create a market-neutral position whose price at execution becomes cash received by the seller, or borrower, and whose fixed value at expiration is the total amount received by the buyer, or lender. The difference between the two represents the "interest" paid to the lender.