ExodusPoint Capital Management, Millennium Management, and Citadel are among a group of around 10 hedge fund firms that dominate the so-called basis-trade, that looks to generate returns on the tiny price gaps between bond futures and their underlying US Treasuries, according to a report by Bloomberg.

The funds rely on vast sums of money borrowed from Wall Street banks — often 50 times what they invest themselves — to pump tens of billions of dollars into the trade and supercharge returns.

The business has become so big that the funds are now central to the buying and selling of Treasuries, one of the cornerstones of global capital markets, and have attracted the attention of regulators.

The report cities a 'senior Wall Street figure' who’s worked for years with the core players, as estimating that between them, the 10 firms account for for roughly 70% of all hedge fund basis-trade bets, while according to data from the Commodity Futures Trading Commission, eight or fewer traders are behind almost half of all bets against two-year Treasury futures, compared with 29% a year ago.