Traders are adding to their bets on US Treasury bonds continuing their steady trend, expecting narrow fluctuations in yields in the coming weeks.

Although the United States and Iran have not been able to reach a peace agreement, traders are still increasing their bets that the volatility in the bond market will continue to decline. After a key indicator of U.S. Treasury bond volatility dropped to pre-war levels, traders continued to make large bets, betting that the market will remain stable for the next few weeks and will keep U.S. bond yields fluctuating within a narrow range. So far this month, the fluctuation range of the U.S. 10-year Treasury bond yield is only 16 basis points. The two-week ceasefire agreement between the United States and Iran is set to expire on Wednesday, and the agreement has helped lower oil prices from multi-year highs. The increasing popularity of shorting volatility strategies is also reflected in the rising demand for bearish positions in so-called straddle and strangle structures on U.S. 10-year Treasury bonds.