Most Perfect Trade In Markets Is Getting Dangerous
Source: zerohedge.com
- Traders are piling into a popular bet that US rates will keep falling, making it the most crowded trade in markets.
- This "short 10-year Treasury" position hit $800 billion notional size, matching records from past bubbles.
- Heavy crowding raises crash risks if rates rise unexpectedly, endangering leveraged players.
The article warns that the hottest trade in markets - betting on lower US bond yields via shorting 10-year Treasuries - has grown so massive it's becoming risky. Hedge funds and speculators have built $800 billion in positions, rivaling levels seen before blowups like the 1994 bond massacre. It matters because if the trade unwinds, it could spark sharp yield spikes and market turmoil, hitting everyone from pensions to stocks.