“The mechanics are challenging,” Gundlach wrote in an e- mail on April 29. Earlier this week, the chief executive officer of DoubleLine Capital said in an interview on Bloomberg Television that he’s thinking of amplifying a wager against 2- year German notes using leverage.

“It seems to me there’s almost no way to lose,” he said in that interview. “I wonder why people don’t leverage up negative bonds.”

There are legitimate reasons why everyone isn’t. For one, there appear to be no negative-yielding derivatives contracts tied to this debt. And Europe closely regulates short-selling of government bonds. Then, even if you could do it, you may have to park cash at some point in European bank accounts, which make you pay to hold your money because the region’s deposit rates are negative.

“You can actually lose money being short negative yielding debt,” said Ashish Shah, the New York-based global head of credit strategies at AllianceBernstein Holding LP. “People charge you even more in the short term to hold cash.”

Eoin Treacy's view

Governments have engineered a system that makes shorting the securities they issue a risky proposition. This is despite the fact that paying the government to take your money could only look sensible is some sort of alternative reality. 

Bunds trade at 156 for a contract that has a par value of 100. By any standard this is an extreme situation. However with the ECB printing and demand for benchmark bonds still strong, the pullback that is currently underway may yet find support in the region of the 200-day MA.

The Spanish 2-year yield traded in negative territory for a brief time yesterday. There is potential for some continued ranging near the zero bound but a sustained move above 0.1% would be required to question supply dominance.