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This Week in Futures Options

Gold, crude oil, corn, soybeans and more - with so many tradeable products the futures options market is an intimidating place. How can you possibly keep track of the latest trading activity across so many different products? Don’t worry - we’ve got you covered. Welcome to This Week in Futures Options - the program designed to help active futures options traders stay on top of this ever-changing marketplace. Each week we’ll break down the top trades, hot products, volatility explosions and much more. Whether you’re an experienced veteran or a newcomer looking to separate the wheat from the lean hogs, This Week in Futures Options has the information you can’t find anywhere else...
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Now displaying: December, 2019
Dec 20, 2019

TWIFO 181: The Highs and Lows of 2019

  • HOST: MARK LONGO, THE OPTIONS INSIDER MEDIA GROUP
  • CO-HOST: SEAN SMITH, MD OF DERIVATIVES LICENSING, FTSE RUSSELL
  • CME HOTSEAT GUEST: RUSSELL RHOADS, HEAD OF DERIVATIVES RESEARCH, TABB GROUP

WHAT WERE THE MOVERS AND SHAKERS IN FUTURES OPTIONS FOR THE YEAR?

TOP 5 

  • PALLADIUM: + 58%
  • NASDAQ 100 EMINI: + 35.8%
  • CLASS 3 MILK: +35.5%
  • EURODOLLARS: 34.5%
  • WTI: +31.5%

EQUITIES

  • TRADE WAR OPTIMISM LIFTING MARKETS, CRUSHING VOLATILITY
  • VIX: 12.5 - DOWN 2 FROM LAST SHOW
  • VVIX: 98.75 - DOWN 4.75 FROM LAST SHOW
  • RVX: 14.25 - DOWN 2.75 FROM LAST SHOW 
  • VIX/RVX SPREAD: 1.75 - MUCH NARROWER FROM LAST SHOW
  • DON'T LOOK NOW BUT SMALL CAPS ARE BREAKING OUT

CRYPTO

  • CME Bitcoin futures (BTC) turn two on Wednesday, December 18. 

FUTURES OPTIONS FEEDBACK

  • QUESTION FROM AVAST!: What were your surprises for the year in fut-opts?
  • QUESTION FROM ANGEL: Is there a level at which the rvx/vix trade becomes particularly attractive.
Dec 13, 2019

TWIFO 180: Metals Mysteries and Yield Curve Conundrums

  • HOST: MARK LONGO, THE OPTIONS INSIDER MEDIA GROUP
  • CME HOTSEAT GUEST: ERIK NORLAND - EXECUTIVE DIRECTOR AND SENIOR ECONOMIST

WHAT WERE THE MOVERS AND SHAKERS IN FUTURES OPTIONS THIS WEEK?

RECENT CME RESEARCH

METALS

 

  • QUESTION FROM MELTIM: Do you buy that metals only selloff when the calls are bid?

 

  • QUESTION FROM ELION: Any follow up data on the cme metal skew study? I find that one somewhat perplexing.

Gold and Silver Options Pointing to a Pullback https://www.cmegroup.com/education/featured-reports/gold-and-silver-options-pointing-to-a-pullback.html

  • Silver and gold options achieved exceptionally positive skewness late this summer.
  • Exceptionally positive options skewness often precedes corrections.
  • Even as of mid-October, gold and silver options skews remain unusually positive.

Industrial Metals: Can Demand Meet Supply Challenge  https://www.cmegroup.com/education/featured-reports/industrial-metals-can-demand-meet-supply-challenge.html

  • Two decades ago, the main problem in base metals markets was insufficient supply to meet rising demand, particularly from China. As a result, prices soared. Copper prices rose 440% between 2000 and 2011. For aluminum, prices doubled between 2000 and 2008 despite a growth in supply.

RATES/YIELD CURVE

Which Yield Curve Foretells Growth Best?  https://www.cmegroup.com/education/featured-reports/which-yield-curve-foretells-growth-the-best.html

  • The private sector US yield curve remains inverted while the public sector curve flipped positive.
  • Private sector yield curves have been better indicators of growth in the past 20 years.
  • Yield curves misfired in the mid-1990s, predicting a slowdown that didn’t happen.
  • Soaring equities could enable the economy to defy the yield curves’ suggestion of slower growth ahead.
  • A larger budget deficit, however, could make it harder for the US government to fight off any slowdown. 

What Global Yield Curves Signal About 2020 Growth - https://www.cmegroup.com/education/featured-reports/global-growth-outlook-for-2020.html

  • Yield curves are pointing to stronger growth in China, India, Chile and Brazil.
  • Yield curves are pointing towards sharp slowdowns in the US, eurozone, Japan and Israel.
  • All 23 yield curves examined have a positive correlation with growth 3-5 quarters in the future.
  • There is a wide variance in the forecasting accuracy among the yield curves.

FUTURES OPTIONS FEEDBACK

  • QUESTION FROM DM75: What are you expecting when bitcoin options launch on cme next year? Happy Holidays to the OIR crew. You guys are the best. 
Dec 6, 2019

TWIFO 179: DIRECTIONALLY INTIMIDATING CRUDE AND AGS

  • HOST: MARK LONGO, THE OPTIONS INSIDER MEDIA GROUP
  • CME HOTSEAT GUEST: ADAM WEBB, FOUNDER OF MACROHEDGED

WHAT WERE THE MOVERS AND SHAKERS IN FUTURES OPTIONS THIS WEEK?

WTI

 AGS

  • SOYBEAN MEAL: DECENT OPTIONS VOLUME - ABOUT 40K ON THE TAPE THIS WEEK
  • SRW: AKA SOFT RED WINTER WHEAT (AKA CHICAGO WHEAT) - ABOUT 80K CONTRACTS ON THE TAPE THIS WEEK
  • CLASS 3 MILK: TRADING A WHOPPING 7500 CONTRACTS THIS WEEK

EQUITIES

  • TRADE WAR OPTIMISM LIFTING MARKETS, CRUSHING VOLATILITY
  • VIX: 14.75 - UP 1
  • VVIX: 99 - UP 3.25 FROM LAST SHOW
  • RVX: 18.50 - UP 1.75 FROM LAST WEEK 
  • VIX/RVX SPREAD: 3.75 - WIDER THAN LAST WEEK

FUTURES OPTIONS FEEDBACK

  • QUESTION FROM JACKSON KNIGHT: WHY IS IT SO HARD TO TRADE FUT OPTS WITH MOST MAJOR BROKERS IN 2019? SEEMS LIKE ITS STILL 2009 FOR A LOT OF THESE FIRMS WHO ONLY EXPECT YOU TO TRADE APPLE AND SPY?
  • QUESTION FROM ANALYSIS1: WHY DO YOU GUYS TALK ABOUT SKEW SO MUCH? I FIND IT CONFUSING. 
  • QUESTION FROM MLLRTZ: CAN YOU DISCUSS OPEC WATCH ON THE SHOW?
  • QUESTION FROM ELION: ANY FOLLOW UP DATA ON THE CME METAL SKEW STUDY? I FIND THAT ONE SOMEWHAT PERPLEXING. 
  • QUESTION FROM ELLIOTT
  •  WHY DO SOME PRODUCTS DO LARGE FUTURES VOLUME BUT SMALL OPTIONS VOLUME? DOESN’T ONE USUALLY LEAD TO THE OTHER?
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