Bond traders are turning to the short-dated maturity Treasury options market to hedge potential for soaring Treasury yields over the coming days, ahead of key risk events including Thursday’s December inflation report. The theme has been prominent since the start of the year, as open interest, or the amount of new risk, has soared in put options targeting a Treasuries selloff over call options. Activity has picked up again this week, with demand continuing to emerge before December CPI and PPI as well as auction event risk. To be sure, an underlying long position remains in the Treasury market and it could be the ... (full story)