Large-scale trading of SOFR options is expected, with the Federal Reserve's easing efforts likely to be less than previously anticipated

Monday's SOFR options trading included three block trades totaling 25,000 contracts of October put options, which may be betting that the Federal Reserve's easing policy will decrease this year. According to a U.S. trader, these SFRV5 96.00 put options were traded between 11:44 and 11:46 AM New York time, with a minimum quote of 9 basis points initiated by the buyer for each trade. These options reference futures expiring on December 25, trading at around 96.11, with an expiration date of October 10, following the Federal Open Market Committee (FOMC) interest rate decision announcement on September 17. As of last Friday's close, the open interest for this option was approximately 67,000 contracts