A large options transaction in the U.S. Treasury market is betting that continued selling will push the 10-year yield above 5%. The trade paid about $14 million in premium, making it sizable for the derivatives market, and would break even if the yield reaches roughly 5.1%. At 5.2%, it would generate about $15 million in profit. The 10-year yield has again approached its slightly-above-5% peak from 2023, while the 30-year Treasury yield rose to 5.35% on Thursday, its highest level since 2007. Rising oil prices could add to already-elevated inflation, increasing pressure on bonds. Traders have also reported behind-the-scenes hedging that may have amplified the selloff. If the decline continues, investors may buy more bearish options to protect portfolios and increase convexity hedging, a strategy that adjusts positions as market sensitivity changes. The 10-year yield last reached roughly 5.2% in 2007.