With U.S. Treasuries mired in a sustained selloff, calling a market bottom might sound reckless, yet a small group of options traders is growing increasingly willing to wager on exactly that possibility.

According to data compiled by Cboe LiveVol and SpotGamma, call options overwhelmingly dominated TLT (the 20-plus-year Treasury bond ETF) options trading on Wednesday, with volume running 50% above the 30-day average.

Traders bought nearly 370,000 call contracts while purchasing fewer than 100,000 puts; at the same time, put selling exceeded put buying. Among the ETF's top ten most-traded contracts, nine were calls.

Although some call selling also occurred, both volume and premium size tilted toward the bullish camp, suggesting traders see an unfavorable risk-reward ratio in continuing to bet on rising yields. When TLT's price climbs, it signals falling market interest rates.

Beyond that, the most popular trade in TLT's October 30 expiration monthly options was buying the 82-strike calls. That contract carried a premium of just 10 cents and traded roughly 16,000 lots on the day. For the contract to turn a profit, long-dated bonds would need to recoup the entire decline since September 22 — the most ferocious stretch of this year's bond selloff, during which TLT plunged 6% and 30-year Treasury yields broke above 5.6%.

Most of the buying came from one aggressive purchaser at 10:01 a.m. Eastern Time: he spent at least $250,000 to buy 25,000 call contracts at the 82 strike expiring October 16 and October 30, along with 5,000 calls at the 80 strike expiring October 30. The trade's absolute dollar size was not enormous, but it was the largest buy order among month-end expiration contracts; shortly after it was completed, the 10-year note auction landed and drove a sharp rebound in the bond market.

Jim Perry, founder and chief investment officer of Perry International Capital Partners, said in a text message: "Today the 10-year saw strong buying, with unusually robust auction demand. The attitude was simply 'fill me at any price, I just want the bonds.'" At 1 p.m. Eastern Time today, the 30-year auction will face another critical test.

Wednesday's TLT options flows echoed rare optimistic trades in the rate-sensitive utilities sector. Last Friday, options on the utilities sector ETF (XLU) broke from a month-long pattern of persistent put buying, with a trader selling $1 million worth of puts to bet that the sector's decline would slow or even reverse. Since last Friday, utilities have gained about 3%. In Wednesday's XLU options trading, although call selling accounted for a high share, almost no investors bought puts. Of the ETF's total $12 million in premium volume, only $1 million came from call options.

Perry added: "Yields may be peaking. But I'd rather hold stocks than bonds. If yields fall, stocks will outperform bonds."