Also 10-year T-Note, silver, crude oil, and Japanese yen futures
- Nasdaq 100 E-mini futures (/NQ): +0.60%
- 10-year T-note futures (/ZN): +0.13%
- Silver futures (/SI): +2.14%
- Crude oil futures (/CL): -1.81%
- Japanese yen futures (/6J): +0.27%
Market optimism rose today as traders digested several positive tailwinds from the global economy and corporate earnings. China reported positive economic data overnight showing that its economy is stronger than previously thought. Apple (AAPL) rose nearly 2% after Bloomberg reported strong iPhone 16 sales in China. Market darling Nvidia (NVDA) rose 1% on a positive note from Bank of America (BAC). CVS Health (CVS) fell over 10% after announcing its long-tenured CEO would be replaced.
|
Symbol: Equities |
Daily Change |
|
/ESZ4 |
+0.24% |
|
/NQZ4 |
+0.6% |
|
/RTYZ4 |
+0.5% |
|
/YMZ4 |
-0.24% |
U.S. equity markets were higher this morning after an overnight rebound in China where sentiment improved following an upbeat gross domestic product (GDP) report. Nasdaq 100 futures (/NQZ4) were 0.60% higher ahead of the New York open. Netflix (NFLX) traded nearly 7% higher in pre-market trading after the streaming service reported subscriber growth that beat estimates.
|
Strategy: (42DTE, ATM) |
Strikes |
POP |
Max Profit |
Max Loss |
|
Iron Condor |
Long 20100 p Short 20200 p Short 20800 c Long 20900 c |
18% |
+1545 |
-455 |
|
Short Strangle |
Short 20200 p Short 20800 c |
50% |
+15840 |
x |
|
Short Put Vertical |
Long 20100 p Short 20200 p |
59% |
+665 |
-1335 |
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|
Symbol: Bonds |
Daily Change |
|
/ZTZ4 |
+0.05% |
|
/ZFZ4 |
+0.09% |
|
/ZNZ4 |
+0.13% |
|
/ZBZ4 |
+0.21% |
|
/UBZ4 |
+0.22% |
Bonds were a little higher this morning but losses from yesterday’s sell-off remain mostly untouched so far. The 10-year T-note futures (/ZNZ4) rose 0.08%, which took the underlying yield to trade around 4.085%. That puts the yield on track to drop about 0.5% for the week following two weeks of strong gains. Several Federal Reserve speakers are on the schedule today, which could influence interest rate cut bets, and in turn, bond yields.
|
Strategy (35DTE, ATM) |
Strikes |
POP |
Max Profit |
Max Loss |
|
Iron Condor |
Long 111 p Short 111.5 p Short 113 c Long 113.5 c |
30% |
+343.75 |
-156.25 |
|
Short Strangle |
Short 111.5 p Short 113 c |
55% |
+1406.25 |
x |
|
Short Put Vertical |
Long 111 p Short 111.5 p |
70% |
+156.25 |
-343.75 |
|
Symbol: Metals |
Daily Change |
|
/GCZ4 |
+0.59% |
|
/SIZ4 |
+2.14% |
|
/HGZ4 |
+1.64% |
Silver prices (/SIZ4) got an upside surprise, rising over 2%, after China reported upbeat economic data. Along with a drop in yields, the softer dollar is also clearing a path higher for the metal. Silver relies more heavily on industrial applications than gold as part of its demand complex, so the move we are seeing this morning lines up with the narrative laid out overseas overnight.
|
Strategy (38DTE, ATM) |
Strikes |
POP |
Max Profit |
Max Loss |
|
Iron Condor |
Long 31.5 p Short 31.75 p Short 33.75 c Long 34 c |
24% |
+920 |
-330 |
|
Short Strangle |
Short 31.75 p Short 33.75 c |
57% |
+9840 |
x |
|
Short Put Vertical |
Long 31.5 p Short 31.75 p |
59% |
+540 |
-710 |
|
Symbol: Energy |
Daily Change |
|
/CLZ4 |
-1.81% |
|
/HOZ4 |
-0.6% |
|
/NGZ4 |
-1.45% |
|
/RBZ4 |
-1.16% |
Crude oil futures (/CLZ4) fell about 1% thisiea o morning to bring its weekly loss beyond 8%, which would be the biggest drop for crude oil on a percentage basis in 2024. Traders sold the commodity after two forecasters, OPEC and the International Energy Agency (IEA) , trimmed their growth forecasts for next year. Meanwhile, China saw more weakness in its refinery sector in September, marking the sixth straight drop.
|
Strategy (28DTE, ATM) |
Strikes |
POP |
Max Profit |
Max Loss |
|
Iron Condor |
Long 67 p Short 67.5 p Short 71.5 c Long 72 c |
21% |
+370 |
-130 |
|
Short Strangle |
Short 67.5 p Short 71.5 c |
52% |
+4280 |
x |
|
Short Put Vertical |
Long 67 p Short 67.5 p |
57% |
+220 |
-280 |
|
Symbol: FX |
Daily Change |
|
/6AZ4 |
+0.3% |
|
/6BZ4 |
+0.36% |
|
/6CZ4 |
+0.02% |
|
/6EZ4 |
+0.33% |
|
/6JZ4 |
+0.27% |
Japanese yen futures (/6JZ4) continued to struggle this week but got a little bounce this morning. The trend for the currency remains strongly tilted to the downside on a technical basis. The fundamental outlook remains weak as well. The Bank of Japan has been inconsistent with delivering its message to the markets, underscoring the lack of a unified central bank that has apparently been influenced by outside politics.
|
Strategy (49DTE, ATM) |
Strikes |
POP |
Max Profit |
Max Loss |
|
Iron Condor |
Long 0.0066 p Short 0.00665 p Short 0.0068 c Long 0.00685 c |
29% |
+425 |
-200 |
|
Short Strangle |
Short 0.00665 p Short 0.0068 c |
56% |
+1937.50 |
x |
|
Short Put Vertical |
Long 0.0066 p Short 0.00665 p |
68% |
+237.50 |
-387.50 |
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts #Overtime, Monday-Thursday. @cvecchiofx
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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