(Bloomberg) — For the first time in nearly a year, insurance against a drop in U.S. Treasury yields — obtained in the options market — costs more than protection from higher yields.

It’s a function of the relative price of put and call options on 10-year note futures. Puts, used to hedge for higher yields, have cheapened versus calls as the Treasury market has rallied this week. As a result, a gauge based on a widely-traded segment of the market — the implied volatility of the futures represented by the 1-month 25-delta call/put skew — has returned to positive this week.

The diminishing put-option premium is consistent with other indications that positioning has become less short this week. JPMorgan Chase & Co.’s weekly Treasury client survey released Tuesday found that while shorts still reign, positioning was less extreme.

The 10-year Treasury yield dropped as low as 1.25% Thursday, extending this week’s aggressive rally. The pace of the move caught some off guard, and as short positions hit stops, covering helped extend the drop in yields.

“The more we rally, the more investors need to buy (stop-outs and stop-ins) and that’s how the latest price push in bonds feels,” Citigroup strategists William O’Donnell and Edward Acton said in a note.

Meanwhile the flattening of the Treasury yield curve signals loss of confidence in the reflation scenario. Combined with the potential for mortgage-related activity as rates fall, it’s pumping up the cost of hedging for lower yields via options.

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