Persistently surging interest rates have toppled two previously steady macro trades, and options traders are wagering that one of them is poised for a recovery bounce.

As the 10-year Treasury yield climbed to 5.3% and the 30-year yield touched 5.4%, gold fell 4% to its lowest level since the first week of August. High-yield corporate bonds extended a five-session losing streak, with the HYG ETF price hitting a new low since April 2025. Judging by Monday's options flows, traders see rebound potential in gold, while for high-yield bonds the market is betting conditions could deteriorate further.

Chicago Board Options Exchange LiveVol data shows that call volume on the SPDR Gold ETF (GLD) was roughly double put volume, with more than 68,000 call contracts bought versus fewer than 32,000 puts. According to Barchart, net options sentiment was bullish, net Delta exposure leaned long, and net bullish capital flow approached $2.8 million. Although call buying and selling volumes in the GLD market were roughly balanced, the single largest trade of the day was a sale of 2,000 put contracts with a strike price of 375 expiring in January 2028, with a notional value of $5.9 million. That trader may have been closing an existing short position or betting that gold prices will find support near $375. For most of this summer, GLD oscillated in a roughly 10-point range between 370 and 380. Investors who sell puts are essentially betting that the underlying price will stay above the option's strike price, collecting the premium while taking on the corresponding risk.

SPDR Gold Shares ETF (GLD) market data: closing price 377.91, down 15.50 (-3.94%); after-hours 380.74, +2.83 (+0.75%). Both gold and high-yield bonds show a pronounced negative correlation with the 10-year Treasury yield: GLD's 10-day correlation coefficient is -0.8, while HYG's is as high as -0.99.

But options trading in the iShares iBoxx $ High Yield Corporate Bond ETF (HYG) shows one-sided bearish sentiment. Cboe LiveVol data shows that on Monday HYG options volume reached more than 2.5 times its 30-day average, with put volume at 2.5 times call volume: 52,000 put contracts bought versus just over 15,000 calls.

iShares iBoxx $ High Yield Corporate Bond ETF (HYG) market data: 77.54, -0.32 (-0.41%). SpotGamma data shows that total HYG options premium traded was about $35 million, of which $30 million was in puts. By traded value, 11 of the top 12 most-bought contracts were puts; by volume, 8 of the 10 hottest contracts were puts. The most heavily traded was the November 20 expiry put with a strike price of 78.

Nigam Arora, founder of The Arora Report, said in a phone interview: "The market had been overly optimistic on high-yield bonds, and default risk is very likely far higher than the market expects. A lot of this debt is floating-rate, and a large wave of maturities is coming next year. Investors were previously lured by the coupon, but credit spreads have not performed well, and the risk-reward ratio is not attractive. I won't touch this asset class."