Brief: $850B Net Short US Treasuries

Leveraged funds' net short futures and options position in UST 10Y falls by a record $32 billion week-on-week, raising the combined net short position in UST 2Y, 5Y, 10Y to -$849.9 billion.

April 15, 2025 • Est. Reading Time: 3 minutes

Mobius Intel Brief:

Post-Liberation Day effects appeared in leveraged hedge funds’ Treasury futures and options holdings, with lev. fund managers’ net short position in 10Y US Treasuries gaining by a record (notional) $31.6 billion W/W to a total notional value of -$189 billion over the seven days ending April 8.

Key Intel

  • Leveraged funds’ aggregate net short position of -$849.9 billion across 2Y, 5Y, and 10Y U.S. Treasuries remains below the record -$1.06 trillion notched in November 2024. Still, the $31.6 billion week-on-week increase in lev. funds’ net short interest in 10Y UST futures and options is the largest weekly change since at least 2015.

  • A $16.7 billion W/W decrease in lev. funds’ 10Y length—also the largest weekly decrease in data back to 2015—drove last week’s record jump in net short interest.

  • Basis Trade: Leveraged funds’ T-Note futures and options holdings offer indicative insights into hedge funds’ basis trade activity—whereby funds capture the basis point arb between Treasury futures and the underlying cash bond. While the trade can provide timely liquidity for the cash Treasury market, funds’ near-record short interest (accomplished with ~100x leverage on cash bond collateral) warrants caution amidst rapid policy changes and trade war-related volatility in sovereign debt markets—reminiscent of the rapid unwind of the yen-funded carry trade in July 2024.

This commentary contains our views and opinions and is based on information from sources we believe are reliable. This commentary is for informational purposes, should not be considered investment advice, and is not intended as an offer or solicitation with respect to the purchase and sale of commodity interests or to serve as the basis for one to decide to execute derivatives or other transactions. This commentary is exclusively intended for Mobius clients and is not considered promotional material.