Options Traders See More Room for US Long Bonds to Underperform

Options traders boosted bets that 30-year Treasuries will trail other US government bonds as President Donald Trump’s move to fire a Federal Reserve governor intensified concerns around the central bank’s independence.

On Tuesday, as both sides vowed a legal fight over Fed Governor Lisa Cook’s ouster, demand picked up for put options on the long bond — which benefit from price declines — relative to call contracts that would gain in a rally. The so-called skew in favor of puts was the largest in almost two weeks. The 30-year is the only part of the yield curve where ...