Free Trial

Late SOFR/Treasury Option Roundup: Rate Cut Positioning Rises

US TSYS

Two-way positioning ahead Friday's November employment data leaning towards SOFR call structures and Treasury puts Tuesday, decent overall volumes. Underlying futures have rallied back to early September levels following lower than expected JOLTS job openings data while markets reprice 2024 rate cut projections: December steady at -.3bp at 5.333%, January 2024 cumulative -3.8bp at 5.298%, March 2024 chance of rate cut climbs to -60.0% (vs. -55.2% this morning) with cumulative at -18.8bp at 5.148%, May 2024 pricing in -72.4% (-71.2% this morning) with cumulative -36.9bp at 4.967%. Fed terminal at 5.33% in Feb'24.

  • SOFR Options:
    • +15,000 SFRH4 95.75 calls, 4.75
    • +15,000 2QM4/3QM4 97.00/98.50 call spd spd 3.5-4.0 (bull curve steepener)
    • +10,000 SFRH4 96.00 calls, 3.75
    • 4,000 SFRG4 95.18/95.25 call spds ref 94.875
    • 2,000 SFRF4 94.68 puts ref 94.87
    • Block, 4,000 SFRF4 94.62/94.75 put spds, 2.0 vs. 94.87/0.17%
    • 1,750 SFRF4 94.75/95.00/95.12 1x3x2 broken call fly ref 94.875
    • 2,500 SFRM4 96.00/97.00 call spds ref 95.24
    • Block, 2,500 0QG4 97.00/97.25 call spds, 3.0 vs. 96.185/0.05%
    • 1,100 SFRF4/SFRG4 94.62/94.68/94.75 call fly spd
    • 2,000 SFRZ3 94.56/94.62/94.68 call flys ref 94.6225
    • Block, 2,500 SFRM4 94.50/94.75 put spds vs. SFRM4 95.62/95.87 call spds ref 95.245
    • 1,200 SFRH4 94.87/95.87 2x3 call spds ref 94.875
    • 2,500 0QZ3 96.37/97.00 call spds ref 95.965
    • 1,300 SFRG4 94.56/94.62/94.75 broken put fly ref 94.8985
    • 2,000 SFRH4 94.43/94.75/94.87 broken put fly vs. SFRZ3 94.62 straddle
  • Treasury Options:
    • 2,000 TYH4 107.5/108.5/110.5/111.5 put condors, 33 ref 110-28
    • 2,400 TYF4 110 puts, 32 ref 110-26.5, total volume over 8.2k
    • +7,000 TYH4 113.5 calls, 46 ref 110-29
    • +5,000 USG4 108/110/112/114 put condors, 15 ref 119-00
    • 2,500 USF4 114/116 put spds, 16 ref 119-07
    • 1,200 USF4 121 calls, 47 ref 119-00 total volume over 6.9k
    • 2,500 TYG4 108/109.5 2x1 put spds ref 110-19
    • Update, appr +25,000 Wed wkly 10Y 109/109.5/110 put trees, 3
    • 7,100 wk3 10Y 108.5/109 put spds, ref 110-21.5
    • 3,000 TYF4 109.5 puts 5 over TYF4 110.75/111.75 call spds ref 110-19.5
    • 1,760 TUF4 102/102.25 3x2 put spds ref 102-13.12
    • -4,500 USF4 116/121 call spds, 228 vs. 118-17/0.48%
    • 1.000 FVF4 107.5 calls, 33 ref 107-09
    • 2,000 TYF4 106.5/107.5/108.5 put flys
    • 2,000 TYG4 107.5/110 2x1 put spds ref 110-13.5

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.