Investing.com -- Commodity Trading Advisor positioning in US Treasury futures remains heavily short, according to Bank of America. This week's sharp increase in yields provided additional room for those positions, moving short-covering triggers further away.

The US dollar continued its decline with a large drop on Wednesday, creating pressure on stretched EURUSD shorts held by slower-moving trend followers. Bank of America's model indicates EUR buying from 1.1691 to 1.1853 against Friday's 1.1679 reference level. CAD shorts also faced pressure this week, though stop-out risk remains more limited. CTA positioning against the dollar is not entirely one-sided, as trend followers maintain long positions in MXNUSD, which has supported performance in recent weeks.

CTA equity positioning climbed this week and returned to levels seen before the outbreak of the Iran conflict, with room to increase further if realized volatility continues to decline. Faster-moving models could still add exposure in the US and Japan, while European positioning appears more stretched, sitting in consensus long across trend speeds.

A bearish price path could trigger large unwinds, with global equity selling potentially exceeding $100 billion. For individual indices, Bank of America sees selling accelerating on declines of roughly 3% in the S&P 500, 5% in the Nasdaq-100, 5% in the Russell 2000, 4% in the Euro Stoxx 50, and 5% in the Nikkei. The majority of any selling would come from medium- to longer-term trend followers.

Oil prices continued higher on renewed conflict in Iran, and trend followers have been adding to long positions, led by medium-term models and followed by longer-term followers. In gold, the rally extended, but CTAs are likely not yet meaningfully involved after the recent flattening of shorts. Medium- and long-term gold trends remain negative, though the fastest-moving models could be starting to accumulate a long position. Trend followers remain stretched long copper and soybean oil.

S&P 500 hedger gamma ended Wednesday at $3.2 billion, slipping modestly from mid-week levels as positive gamma expiries rolled off. Monthly option expiry accounted for a relatively small share of $0.6 billion of total gamma as of Wednesday, with hedgers net long approximately 5,000 contracts between 7,550 and 7,750. Hedger gamma is positive across every expiry next week, with options expiring during the Jackson Hole conference on August 27 and August 28 collectively contributing approximately $2.8 billion. Hedger vega positioning in options expiring beyond one month remained net short, in line with last week's levels.