And now for some fishy âhow low can they go?â bond-rally business. Hereâs an interesting development in the bund options market â passed along in a note on Thursday by Citiâs FX analysts (emphasis ours): There was a lot of activity in the Dec 138/140 call spread yesterday â 22,000 contracts traded at 20 last night and a further 36,000 have been bought at 19 this morning. Earlier this week, 62,000 contracts in the Dec 137/139 call spread were bought at 20. So a total of 120,000 DISTANT OTM call spreads have been bought, apparently by the same account. âWe believe that this large upside position is simply covering tail risk of a third standard deviation move toward ultra, ultra low rates,â is the view of our rates colleagues. Or perhaps the artefact of a certain crazed enthusiasm â the contracts were first traded on a day when bund futures hit record highs. But an intriguing signal nonetheless. Whether of runaway momentum in this rally, or of a much grander shift to bunds amid fear of deflation and QEasiness â well, weâre just not sure. http://ftalphaville.ft.com/?segid=70409 ThatÂ´s my short signal. Thank you.