[A large options transaction occurred in the U.S. Treasury market, betting that the 10-year yield would rise above 5%] On September 10, a large options transaction occurred in the U.S. Treasury market on Thursday, betting that the selling momentum of U.S. Treasury bonds would push the 10-year yield above 5%. Rising oil prices may further stimulate already high inflation, and the options trade is the latest sign that investors are stepping up efforts to hedge bond market risks. The sell-off has pushed 10-year yields back toward a 2023 peak of just over 5%. The 30-year U.S. Treasury yield rose to 5.35% on Thursday, the highest level since 2007. The premium paid for this option transaction was approximately US$14 million, which is considerable in the derivatives market. Previously, traders said there had been a wave of behind-the-scenes hedging activity in the market, fueling the selling. If the decline persists, investors may purchase further put options to protect the portfolio from losses, while also potentially adding to what is known as a convexity hedge. If the 10-year Treasury yield rises to about 5.1%, the deal will reach breakeven; if the yield rises to 5.2%, the proceeds will increase to about $15 million. The last time 10-year yields reached this level was in 2007.