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Trading the global bond market panic

Traders work on the floor of the New York Stock Exchange.
Getty Images
Traders work on the floor of the New York Stock Exchange.

Traders on the floors of Wall Street can't stop talking about the turmoil in the global bond market this week.

The 10-year Treasury yield touched 2.42 percent Thursday, its highest level of the year and up from 2.09 percent a week ago. The yield on the German 10-year bund also hit its 2015 high.

These are not the kind of moves that should happen in the supposedly very liquid and stable global bond market.

The reasons for this vary. Some traders believe investors are dumping bonds in response to strong economic data and the possibility of a smooth resolution to the Greece situation with the European Union.

While others believe it's because of a sudden lack of liquidity in the bond market and investors are running for the exits of a long-term bond bull market.

Regardless, here's a way to trade this turmoil.

Utilizing Kensho, a quantitative tool used by hedge funds, CNBC Pro looked at what happened to stocks when long-term interest rates surged over a 30-day period. The graphic below shows which stocks had the biggest 30-day return on average and what percentage they traded positively during the duration of those trading periods.