Topics this week include:

Equities

Crud Oil/WTI

Ags/Soybeans

Metals/Gold

FUTURES OPTIONS FEEDBACK

Question from Dazzne - Can you explain how the FedWatch tool actually works?

Question from ELE3S - What does Sean think of the new micro futures Russell products? Are there more planned in the future? When does he expect options to be listed?

Question from Omar - Does recent BTC spike make CME more likely to list additional crypto futures like Eth?

Question from Adam Sam - Hello, I have a question about best way of hedging for day traders? I want to short oil ( or anything for that matter) what would be best way for hedging using options? I short oil future but I want to protect the upside. Would you buy ITM call? Write OTM put? Considering that I am day trading would you recommend hedging using shortest expiration or go further out in the month?

Topics this week include:

Equities

Russell/E-mini

Crude Oil/WTI

Metals/Gold

FUTURES OPTIONS FEEDBACK

#QuestionoftheWeek: Let's play a guessing game. Which of the following names has the highest 30-day REALIZED volatility? No cheating. What does your gut tell you? $TSLA #BITCOIN #CRUDEOIL #NASDAQ $QQQ #WTI

• $TSLA
• #BITCOIN
• #WTI #CRUDE OIL
• $QQQ

Topics this week include:

Equities

Metals/Gold

Crude Oil

Ags/Corn

FUTURES OPTIONS FEEDBACK

Question from SHUTDL - Nick still scalping his gold gamma?
Question from Tom D. - What is the biggest stumbling block for an equity option guy looking to dip his toes into the massive futures options pool? I’ll probably start with E-mini options.
Question from Trilo47W - I have to admit that your show is luring me to the “dark side” of futures options. I’m thinking about diving into corn. Good choice?

Question from Elle SW - What is the date for the Russell 2000 reconstitution to take effect?
Question from AllenTown - If you had to bet on the next big crypto derivatives what would it be?

Topics this week include:

Crude Oil/WTI

Rates

Equities

Metals/Gold

FUTURES OPTIONS FEEDBACK

Comment from Optionsgame - You don’t need to talk about gold anymore. There is no Vol.

Question from Animele - OIV is back in the mid 40s. Do you feel crude vol is somewhat unheralded these days as a tradeable vehicle compared to equity vol? Maybe it’s time for a crude vol tradeable product like a VXX to get people into this space?

Topics this week include:

Metals/Gold

Equities

Crude Oil

Ags/Corn

FUTURES OPTIONS FEEDBACK

Question from Lil Cast - Are $gld and $slv really the best choices for traders looking for etf exposure to commodities? I like the fact that they hold the physical commodity.

Topics this week include:

Equities

Crude Oil

Ags/Corn

Metals

FUTURES OPTIONS FEEDBACK

Question from Bilcan - Why no $BTC opts yet?

Question from CL Dance - Why is S&P volatility the only one most people pay attention to?

Question from Frank - What do you guys think of this article? Do you ever use the commodity volatility indices in your analysis? https://www.investing.com/analysis/oil--gold-vs-oil--gold-volatility-indices-200307186. As I've noted recently, the major price resistance and support levels are 80.00 and 60.00, respectively. Corresponding to those are the major ratio resistance and support levels of 3.00 and 2.00, respectively. In this regard, it will be important for the ratio to remain above 2.00 and the ratio 5 MA to remain above the 8 MA to confirm an upward bias on oil on this timeframe.

Topics this week include:

• FX
• Metals/Gold
• Crude/WTI
• Equities
• Crypto<

Futures Options Feedback: Listener questions and comments.

• Question from Leo Orland: What is the base mining/production cost for gold? Are we approaching that level?
• Question from Tatlas: Love Vol Views and TWIFO. I miss the Two-fer Fridays with both shows. Keep up the crude info. Have a somewhat basic question. Can I trade options on WTI/Brent or just futures. Thx again.
• Question from One0761: Are we in the mist of a major correction.

Originally Posted February 20th, 2017

Topics this week include:

• WTI Skew
• Crude vol
• Eurodollars
• Lean Hogs

Futures Options Feedback: Listener questions and comments

• Question from Tom Rios - How has Mexico threatening to buy corn from Brazil and Argentina, rather than the US, impacted corn volatility?
• Question from McTinney - Hello to the TWIFO team and guest! Can you give a little more color on the longer term calls you outlined in gold options last show? Is this the beginning of a trend or just a blip on the radar? Any similar action in silver? Thanks for the show.
• Comment from Jim Church - I like the rent concept. Was that Nick or Mark's idea? I think it should be a regular segment. Maybe "Who's paying the rent this week?"

Topics this week include:

• Emini
• Energy/Oil
• Gold
• Bitcoin
• Winners: KC Wheat, Soybean Meal
• Losers: Lumber, Lean Hogs

Futures Options Feedback: Listeners have their say

• Comment from MJobain - Tell Erik he needs to do some research on bitcoin volatility.
• Comment from Luis J -Good show. Caught it on podcast. Checked out the VIX/Yield curve chart on CME website. I have to admit that looks like nonsense to me.
• Question from Scott Somer -Which products are closest to their 52 week highs in implied volatility?
• Question from Phil Bremer -Does Nick have any thoughts on the inverse volatility craziness?
• Comment from Patricky -Any more research notes for the show?
• Question from Revert -What's historical AVG for Nat Gas skew? Is it typically bid to the calls?

Topics this week include:

• eMini S&P
• WTI/Crude
• Gold
• Bitcoin

Futures Options Feedback: What is on your mind?

• Question from Scott Somer‏: The question I have is, How is the call skew between the July 450 puts and the 550 calls in July Wheat? And how far does call skew get when the markets are in FULL WEATHER mode?
• Question from Chill Bill: Are there any inverse commodity volatility products?

Topics this week include:

• Indices
• Crude
• Bitcoin
• Winners: Soybean meal, EuroDollar
• Losers: WTI, Heating Oil

Futures Options Feedback: Listener questions and comments

• Question from Jill - What happened to S&P skew after this week's selloff?
• Comment from Volvic - Liked all the rates talk. More of that please.
• Question from El Nino3 - Are the skews between eMini, SPY and SPX all correlated?
• Question from McNuggins - Fun show! Maybe bring back the crazy trade of the week? Like the gold trade. Thanks.

Topics this week include:

• Soybeans
• Nat Gas
• Silver

Futures Options Feedback: Options question of the week

Bitcoin Futures are currently trading around $11,500. If #Options existed, how would you trade them? Assuming one-month to expiration would you...?

• 27% - Buy 5% OTM Call
• 32% - Buy 5% OTM Put
• 16% - Sell 5% OTM Covered Call
• 25% - Just Short the Future

Listener questions and comments:

• Question from Camper - Do you notice any interesting patterns in corn volatility skew ahead of crop planting or harvesting?
• Question from Brian Zin - COT reports have CME yet?

Today we feature Sean Smith, Managing Director of Derivatives Licensing & Exchange Data at FTSE Russell.

Topics this week include:

• Looking back at the Russell 2000 in 2017
  • RUT up nearly 12%
  • Interesting trends and developments
  • Russell options breakdown from this week
  • Bonus: RVX
• Crude Oil
• Ags
• Metals

Futures Options Feedback: Options question of the week

Bitcoin futures are currently trading around $11,500. If #Options existed, how would you trade them? Assuming one-month to expiration would you...?

• Buy 5% OTM Call
• Buy 5% OTM Put
• Sell 5% OTM Covered Call
• Just Short the Future

Listener questions and comments

• Question from Alfred: Why aren't CME Bitcoin futures listed on the COT reports?
• Question from Camper: Do you notice any interesting patterns in corn volatility skew ahead of crop planting or harvesting?
• Question from Daley: Can I use QuikStrike to compare and contrast skew charts for the indices to try to find trading opportunities between SPX/DOW, SPX/RUT and all? Thx.
• Question from Lromero: Do all indices have the same issue with OTM puts being so outrageously expensive? Where can I go for cheap protection?
• Question from Kondit: what is shortest duration option contract available on Globex?

Topics this week include:

• Bitcoin
• Crude Oil
• Gold
• Winners - RBOB, Platinum
• Losers - Feeder Cattle, Oats

Futures Options Feedback: Listeners have their say

• Comment from TinySpec - @Options @QuikStrike1 @CMEGroup "Donald Trump might be long bitcoin! "?!?!?!?!?
• Question from MarkClydeBrant1 - Should CL be priced in BTC value of GC to strip out USD risk?...Can't wait to see the COT reports on BTC Commercial Shorts: BANKS.
• Comment from Ezpreso - Good bit on gold v #bitcoin from CME - openmarkets.cmegroup.com/12749/bitcoin-gold-growth-comparison
• Comment from Bilc - Good job on the show Nick! Mark left the show in good hands. He can take vacations more often.
• Question from LV67: Why is futures and FO data so hard to get?
• Question from Camper: Do you notice any interesting patterns in corn volatility skew ahead of crop planting or harvesting?
• Question from Tim Haver: What's the cost for the premium version of quikstrike? I like the free stuff that I play with during the show and I'm thinking about taking the plunge.
• Question from NOZ3T: Is it possible to hedge some of these aggregate commodity ETFs with puts in their underlying itself - so hedge USO with WTI puts, Corn with corn puts - you get the idea?
• Question from NOMNOM: I was excited about #bitcoin but this is giving me pause.

From the article: About 40 percent of bitcoin is held by perhaps 1,000 users; at current prices, each may want to sell about half of his or her holdings, says Aaron Brown, former managing director and head of financial markets research at AQR Capital Management. (Brown is a contributor to the Bloomberg Prophets online column.) What's more, the whales can coordinate their moves or preview them to a select few. Many of the large owners have known one another for years and stuck by bitcoin through the early days when it was derided, and they can potentially band together to tank or prop up the market.

Because bitcoin is a digital currency and not a security, he says, there's no prohibition against a trade in which a group agrees to buy enough to push the price up and then cashes out in minutes.

Other investors say the whales won't dump their holdings, because they have faith in the long-term potential of the coins. "I believe that it's common sense that these whales that own so much bitcoin and bitcoin cash, they don't want to destroy either one," says Sebastian Kinsman, who lives in Prague and trades coins. But as prices go through the roof, that calculation might change.

Topics this week include:

• Crude Oil
• Silver
• Bitcoin

Futures Options Feedback: Listeners weigh in

• Question from Knack - Like the show with the QuikSkew updates. What's the best way for me to take advantage of that information? Should I be trading risk reversals?
• Question from B98 - I know straddle runs are big thing in the indexes. Don't hear them used much in the ags or metals though. Why's that?

Topics this week include:

• Crude
• Gold
• Winners: Soybean Meal, Class 3 Milk
• Losers: Nat Gas, Oats

Futures Options Feedback: Options question of the week

The war for Bitcoin derivatives is heating up again. CME Group is launching #futures on 12/18. CBOE just announced a 12/10 launch date. Not enough? Nasdaq also announced futures with a planned Q2 2018 launch. With so many choices-How will you trade Bitcoin in 2018?

• CBOE Futures 12/10
• CME Futures 12/18
• Nasdaq Futures Q2 2018
• "Old School" Bitcoin

Listener questions and comments:

• Comment from Mark Clyde Brant‏: Who is listing options first? Probably CBOE!
• Many thx to Nick @QuikStrike1 for the heads up about miners bitcoin recycling and selling calls thereby dampening call skew! Keep the inside BTC skinny coming!
• Question from Chilic - Love the TWIFO. Good info. Back to collars - do you guys think bitcoin will be as favorable to collars as other commodities like precious metals?
• Comment from JonasGrumble - Last night, my 19yr old daughter texted me "Have you invested in #Bitcoin yet?" I think we are near a top. Can you say #Shoeshinegirl?
• Question from B98 - I know straddle runs are big thing in the indexes. Don't hear them used much in the ags or metals though. Why's that?
• Question from Baspin - Is gold still the leading candidate for you guys when you're lining up collar trades?
• Question from JacksonTill - What's the biggest #option with retail crowd? WTI? Emini? Gold? Something else?

Topics this week include:

• Crude
• Gold
• Winners: Soybean Meal, Class 3 Milk
• Losers: Nat Gas, Oats

Futures Options Feedback: Options question of the week

The war for Bitcoin derivatives is heating up again. CME Group is launching #futures on 12/18. CBOE just announced a 12/10 launch date. Not enough? Nasdaq also announced futures with a planned Q2 2018 launch. With so many choices-How will you trade Bitcoin in 2018?

• CBOE Futures 12/10
• CME Futures 12/18
• Nasdaq Futures Q2 2018
• "Old School" Bitcoin

Listener questions and comments:

• Comment from Mark Clyde Brant‏: Who is listing options first? Probably CBOE!
• Many thx to Nick @QuikStrike1 for the heads up about miners bitcoin recycling and selling calls thereby dampening call skew! Keep the inside BTC skinny coming!
• Question from Chilic - Love the TWIFO. Good info. Back to collars - do you guys think bitcoin will be as favorable to collars as other commodities like precious metals?
• Comment from JonasGrumble - Last night, my 19yr old daughter texted me "Have you invested in #Bitcoin yet?" I think we are near a top. Can you say #Shoeshinegirl?
• Question from B98 - I know straddle runs are big thing in the indexes. Don't hear them used much in the ags or metals though. Why's that?
• Question from Baspin - Is gold still the leading candidate for you guys when you're lining up collar trades?
• Question from JacksonTill - What's the biggest #option with retail crowd? WTI? Emini? Gold? Something else?

Today's CME hot seat guest is Matt Bradbard from RCM ALTS.

Topics this week include:

• Crude Oil
• WTI
• Gold
• Winners - Iron Ore, Nat Gas
• Losers - Silver, Copper

Futures Options Feedback

• Question from Lil Nic - Updates on CME #bitcoin futures?
• Question from Nick - Update on your covered put spread from 11/10?

While you're in line for your Black Friday deals, why not check out the best of This Week in Futures Options?

This week we are featuring special guest Jeff White, Executive Director of Energy Products.

Topics this week include:

• WTI Options
• Crude Oil
• Nat. Gas
• Winners - Rough Rice, Corn
• Losers - Lean Hogs, Lumber

Futures Options Feedback: Listener Questions and Comments

• Question from Last J - Hello Mark, Nice and guest - Loving the podcast. I'm new to Crude, and I'm trying to wrap my head around WTI. You said WTI 6-mo calendar spread went backward for the first time in 3 years. So does that mean it's usually in contango? Is there a good way to trade this reversion? Also, where is the spread quoted? Can I trade it on most major platforms?

Bitcoin Madness Strikes the Audience

#TWIFO Question of the week: Which options product do you want us to discuss live this Friday 1:30pm CT?

• Natural Gas
• Russell 2000
• WTI Crude Oil
• Or...Bitcoin

What Is Bitcoin Reference Rate?

• The CME CF Bitcoin Reference Rate (“BRR”) is a daily reference rate Of the U.S. Dollar price of one bitcoin as of 4:00 p.m. London time. It is representative of the bitcoin trading activity on Constituent Exchanges and is geared towards resilience and replicability.
• METHODOLOGY: Aggregation of trade executions occurring on Constituent Exchanges between 3:00 p.m. and 4:00 p.m. London time
• All Relevant Transactions are added to a joint list, recording the trade price and size for each transaction. The list is partitioned into 12 equally-sized time intervals of 5 minutes each. For each partition separately, the volume weighted median trade price is calculated from the trade prices and sizes of all Relevant Transactions, i.e. across all Constituent Exchanges. A volume weighted median differs from a standard median in that a weighting factor, in this case trade size, is factored into the calculation. The BRR is then given by the equally-weighted average of the volume-weighted medians of all partitions
• DISSEMINATION: Once per day, every day of the year including weekends and holidays, between 4:00 p.m. and 4:30p.m. London time

Bitcoin Futures Contract Specs

• BRR: Currently $6811
• SIZE: 5 bitcoin, as defined by the CME CF Bitcoin Reference Rate (BRR)
• Minimum Price Fluctuation: Outright: $5.00 per bitcoin = $25.00 per contract. Calendar Spread and Basis Trade at Index Close (BTIC): $1.00 per bitcoin = $5.00 per contract
• Position Limits: Spot Position Limits are set at 1,000 contracts. A position accountability level of 5,000 contracts will be applied to positions in single months outside the spot month and in all months combined. The reportable level will be 25 contracts.
• Price Limits: Special price fluctuation limits equal to 7% above and below prior settlement price and 13% above and below prior settlement price and a price limit of 20% above or below the previous settlement price. Trading will not be permitted outside the 20% above and below prior settlement price.

Could Bitcoin Futures Rein in the Big Price Swings?

• After CME announced that they would soon be offering Bitcoin futures, the price of the digital currency took a big upward swing. However, CME is of the opinion that futures could actually put a stop to Bitcoin’s synonymous volatility.
• CME will be putting in place special price fluctuation limits that will help protect investors from the notorious price swings, but these same protections could also help ease the price swings and make the digital currency settle down somewhat.
• After CME announced that they would soon be offering Bitcoin futures, the price of the digital currency took a big upward swing. However, CME is of the opinion that futures could actually put a stop to Bitcoin’s synonymous volatility.
• CME will be putting in place special price fluctuation limits that will help protect investors from the notorious price swings, but these same protections could also help ease the price swings and make the digital currency settle down somewhat.
• Many believe that it is these violent swings that are stopping mass adoption of the digital currency, especially as a currency. If there was a more steady rate, then Bitcoin would be able to stretch more towards being a currency while still holding onto its power as a store of value.

Other topics this week include:

• Crude
• Gold

Futures Options Feedback: Listeners have their say

• Question from Vamp111: Ciao, anyone know when exactly CME Group will launch Bitcoin Futures??
• Comment from tmal: IMO BTC initially has monster call skew. Bring BTC to the masses.
• Question from Folfox: Do you prefer iron condor vs. iron butterfly? (I know 1 strategy wont work every time, but what scenario is preferred)
• Comment from JNL09: Not sure about the bitcoin implied volatility stated on the show last week. I was sure its at least 200.

Topics this week include:

• Crude Oil
• Gold/Metals
• Wheat/Ags
• Winners: Live Cattle, RBOB
• Losers: Rough Rice, Lumber

Futures Options Feedback: Options question of the week.

Bitcoin just blew past $100B in "market cap." If #Options were available how would you trade them?

• Buy Calls/Call Spreads
• Buy Puts/Put Spreads
• Sell Covered Calls
• Other/Hate #Crypto

Listener questions:

• Question from Mantauk - What is the actual implied volatility of bitcoin?

Topics this week include:

• Nasdaq Skew
• Crude Oil
• Gold/Metals
• Winners: Lumber, RBOB
• Losers: Iron Ore, Nat Gas

Futures Options Feedback: Listeners have their say

• Question from Danubs - Can I buy options on milk?
• Question from Bxvets - What's your favorite sell signal?
• Question from Bullobo11 - What was your most recent and promising buy signal and how did you come across it?
• Question from AdmiralTweezers - Do you foresee any innovations in market making such that it might become less centralized or more crowdsourced?
• Question from Michaelbozzello - What's the most valuable lesson you learned as a market maker that you would tell retail traders trading options?
• Question from LL0C - Mine or not to mine? Do you guys rec mining bitcoin before trading it?

Today in the CME hot seat is Derek Sammann, CME Group Global Head of Commodities and Options Products.

Topics this week include:

• Looking back on “Black Monday”
• Crude Oil/WTI
• Gold/Metals
• Winner this week: Lean Hogs

Futures Options Feedback: Listeners have their say

• Comment form T6BTL - Big on Fed watch. Any other cool tech coming to the site?

Options question of the week: Do you think #Options should be traded after-hours like stock?

• 71% - Yes!
• 25% - No!
• 4% - Don't Care!

Topics this week include:

• Gold
• Crude Oil
• Winners: Nat Gas, Palladium
• Losers: Class 3 Milk, Wheat

Futures Options Feedback: Listeners tell us what's on their minds

• Question from TMD4817: Which is a better timeframe for maxing a 1-3 day "swing" trade with options: wkly expire vs out 1 month vs out 2-3 month
• Question from Patrick Rooney: Do you use futures in your strategies? For hedging perhaps? If so, which? $ES_F? $VX_F? Other?
• Question from OpeningBellCo: Which English soccer team do you support? $MANU or not?
• Question from GGLee: Buying collars means buying skew and paying up. So does it stand that the best spy trade is selling skew by selling 25 delta puts and buying 25 delta calls? Maybe add a cheap hedge with 5 or 10 delta put in case worst comes to pass? Right now I can sell the SPY Oct 25D put for $.55, buy the Oct 25D call for $.55 and then buy put hedge for about $.20 net outlay. Thoughts?