When a trade gets too crowded, it’s usually time to expect the unexpected. Traders who loaded up on bearish bets against U.S. Treasuries using inverse ETFs are getting burned by rising bond prices and falling yields in April.

Treasury yields fell to a one-month low on Monday following the disappointing March payrolls report, with yields on the 10-year note nearing 2%, MarketWatch reports.

In the options market, a recurring theme in recent months has been traders positioning for higher rates and lower bond prices with iShares Barclays 20+ Year Treasury Bond Fund (NYSEArca: TLT), and inverse ETFs such as ProShares UltraShort 20+ Year Treasury Bond (NYSEArca: TBT) and Direxion Daily 30-Year Treasury Bear 3X (NYSEArca: TMV). [Short ETFs for Rising Interest Rates]

This trade “resembles a pile-on effect at this point and may be ‘crowded’ with building levels of short interest,” says Paul Weisbruch, head of ETF/options sales and trading at Street One Financial. [Treasury ETF Bears Reload as Yields Fall]

“If Treasury bond prices continue to surge with equities weakening substantially again this morning, we may see some scrambling from those whom have bearishly bet against longer dated U.S. treasuries via TLT, TBT and TMV,” he wrote in a note Monday.

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