Hedge funds have accumulated an enormous volume of bets on the bond market, exposing the system to a crash. Almost 10% of the U.S. bond market is in the hands of hedge funds. As yields and central bank rates have increased, those hedge funds have massively sold futures in order to protect themselves from the loss of value of their stock.

• Total Short Contracts: Leveraged funds hold a massive short position totaling approximately 2.04 million short contracts in the 10-year futures market.

• Market Share: This colossal short position accounts for about 36% of the entire Treasury futures market (open interest). Although it is down slightly from the all-time high in August 2025 (when it reached 2.53 million contracts, or 45% of the market), these are enormous volumes: prior to 2023, hedge funds’ short positions rarely exceeded one million contracts.