Eurodollar/Treasury Option Roundup

Carry-over bid for outright puts and put spreads reported Tuesday as FI sell-off accelerated this morning after StL Fed Pres Bullard comments on Bbg TV urged Fed to "move aggressively to curb inflation .. faster is better" to get "policy back to neutral", adding 50bp hike "would definitely be in the mix."

• Slight delayed reaction to hawkish StL Fed Bullard comments, lead quarterly Eurodollar futures reversed after going bid on lower 3M LIBOR settle (-0.00386 to 0.95371%, +0.01971/wk). Growing expectation of 50bp hike from Fed in May and June spurred buying of 5,000 Jun 98.00/98.12/98.25/98.37 put condors, 3.5 and 20,000 Jun 98.62 puts 10.5-12.0 over Dec 97.87/98.12 put spds.
• Treasury options saw pick-up in call buying later in session as sell-off in underlying levels out: salient trade included +12,500 TYK 124.5 calls, 22, block buy of 10,000 TYK 122.5/125 1x3 call spds, 24 and buy of +25,000 FVK 115 calls, 38.5-40 vs. 114-29.