Options traders start calling bottom on bond rout after 'bullet bid' 10-year auction

Calling a bottom in the nonstop U.S. Treasury bond sell-off might seem crazy, but a handful of options traders look increasingly willing to do it. Trading in the iShares 20+ Year Treasury Bond ETF (TLT) Wednesday was very call-heavy on volume that was 50% above the 30-day average, according to data compiled from Cboe LiveVol and SpotGamma. Traders bought almost 370,000 calls versus under 100,000 puts in TLT, and sold more puts than they bought. Nine of the top 10 traded contracts in the ETF were calls, and while there was some call-selling, volume and premium was on the side of bulls, suggesting traders think the risk-reward of betting on higher yields isn't great. A rally in the TLT would mean a decline in rates.