### POV, PARSING MASSIVE 10Y.........>

US TSY OPTIONS: ### POV, PARSING MASSIVE 10Y OPTION FLOW

* Over -137,000 TYF 121 calls sold at 5/64. Taken alone, sale is an opener

w/open interest coming into the session only 25,997. NOT a lot of gravy on the

sale -- opening a massive unlimited upside risk call sale for only 5/64 profit

potential. That said, Jan options EXPIRE on December 21, after the final 2018

FOMC and well before the Jan'19 29-30 FOMC. In context, however, sale could be

vs. heavy TYG call buying from a week ago (+20k 122/123.5 1x2c spds, >+65k

118.5c, >35k 119c).

- Or conversely, could be legged sale vs. large buying >60,000 TYF 119.5 calls

today, or vs. the heavy contingency of TYZ calls traded outright and on spd

(59,000 TYZ 119.25 calls, from 11- to 9/64; -10,000 TYZ 119/119.5/120/120.5 call

condors, 6/64 more recently). One trader even suggests the call sale could be a

cross asset curve trade vs. buy of some 80,000 Blue Sep Eurodlr 80 calls 4.0

- Policy tie-in, rate hike probability for Dec 17-18 FOMC has risen to mid-80%

(MNI PINCH model). Fed ch Powell came out less hawkish last night, but remains

in hawk camp, majority of dealers still est 3-4 hikes next year.