A wild card option is a privilege extended to the seller of a Treasury bond futures contract. It allows the seller to wait until after-hours trading to deliver their bonds to the buyer of the futures contract. By doing so, it may sometimes be possible for the seller to acquire a more favorable price than they otherwise would have been able to receive during standard market hours.

Treasury bonds are one of the most widely traded securities on the market, making it easy to find buyers. It is estimated that between 80 and 95 percent of the bond market's trading volume occurs during regular trading hours. This is mainly because institutional traders prefer to trade during the same hours as all other investors. Regardless, buyers and sellers who wish to take advantage of the after-hours market to maximize their profits may choose to utilize a wild card option.

Wild card options are often used by hedge funds and other institutions that have large short positions. In this situation, buyers are more likely to be impatient and unwilling to accept steep discounts on their bond purchases. By waiting until after-hours trading and exercising a wild card option, the seller can potentially lower their short position's cost by a small but significant margin.

Of course, there are a few risks associated with using a wild card option. The futures contract buyer is likely to be extremely nervous and suspicious if they receive their bonds during after-hours trading, which may prompt them to request some form of compensation in exchange for accepting the lower price. Furthermore, prices can often be quite volatile during after-hours trading, meaning that the seller of the Treasury bonds may be unable to receive a price that is any better than the one they were originally offered.

In conclusion, the wild card option provides an additional way for sellers of Treasury bonds to potentially improve their profit margins. By waiting until after-hours trading to deliver their bonds, they may be able to capture a more favorable price than if they had attempted to sell during regular market hours. Of course, there are certain risks associated with utilizing this option, and it should only be done in cases where the seller is confident that the after-hours price will be more lucrative.