Five futures in focus

S&P 500 Sideways Ahead of CPI as Yields Subside

By:Christopher Vecchio, CFA

Also 10-year T-note, copper, crude oil and British pound futures

Five Futures Intraday Performance
  1. S&P 500 E-mini futures (/ES): -0.02%
  2. 10-year T-note futures (/ZN): +0.18%
  3. Copper futures (/HG): +0.81%
  4. Crude oil futures (/CL): +1.29%
  5. British pound futures (/6B): +0.25%

U.S. equity markets opened lower for the second day in a row to add to a lackluster start of the 2024 trading year. Bond yields and the dollar rose ahead of key data points on the U.S. labor market that will likely sway interest rate bets. Today will bring the Federal Open Market Committee’s (FOMC) most recent minutes across the wires.

Symbol: Equities

Daily Change

/ESH4

-0.02%

/NQH4

-0.01%

/RTYH4

-0.11%

/YMH4

-0.02%

U.S. equity futures are mostly unchanged this morning, with S&P 500 contracts (/ESH4) down 0.02%. It appears traders are waiting for tomorrow’s inflation report before making any big moves. Rate cut bets on the Federal Reserve’s path may change on the numbers, which are already in doubt and may be too dovish.



Strategy: (47DTE, ATM)

Strikes

POP

Max Profit

Max Loss

Iron Condor

Long 4730 p

Short 4740 p

Short 4840 c

Long 4850 c

20%

+370

-130

Long Strangle

Long 4730 p

Long 4850 c

49%

x

-4912.50

Short Put Vertical

Long 4730 p

Short 4740 p

64%

+162.50

-337.50

/ESH4

Symbol: Bonds

Daily Change

/ZTH4

+0.07%

/ZFH4

+0.13%

/ZNH4

+0.18%

/ZBH4

+0.20%

/UBH4

+0.24%

U.S. Treasury yields are lower this morning as bond traders assess the economic headwinds ahead of key U.S. data. The 10-year T-note futures contract (/ZNH4) is about 0.18% higher this morning, with the underlying yield trading below the 4% mark. Today’s 10-year Treasury note auction could impact the bond market.

Strategy (44DTE, ATM)

Strikes

POP

Max Profit

Max Loss

Iron Condor

Long 109.5 p

Short 110 p

Short 114.5 c

Long 115 c

58%

+171.88

-328.13

Long Strangle

Long 109.5 p

Long 115 c

28%

x

-500

Short Put Vertical

Long 109.5 p

Short 110 p

85%

+93.75

-406.25

/ZNH4

Symbol: Metals

Daily Change

/GCG4

+0.16%

/SIH4

+0.04%

/HGH4

+0.81%

Copper futures (/HGH4) are bouncing back this morning but remain lower on the week as a stronger dollar weighs on demand, especially out of China—the world’s top consumer. The economic calendar for today is rather light, which makes tomorrow’s inflation data the focal point, followed by Chinese inflation and trade data over the next 24 hours.

Strategy (47DTE, ATM)

Strikes

POP

Max Profit

Max Loss

Iron Condor

Long 3.72 p

Short 3.74 p

Short 3.84 c

Long 3.86 c

21%

+387.50

-112.50

Long Strangle

Long 3.72 p

Long 3.86 c

46%

x

-2862.50

Short Put Vertical

Long 3.72 p

Short 3.74 p

61%

+212.50

-287.50

/HGH4

Symbol: Energy

Daily Change

/CLG4

+1.29%

/HOG4

+1.50%

/NGG4

-6.27%

/RBG4

+2.26%

Crude oil futures (/CLG4) rose over 1% this morning as supply concerns move back into the fold ahead of several data points that will inform the demand side. For now, oil prices are up on a supply disruption in Libya’s oil fields, which might impact up to a quarter of a million barrels per day of oil out of the Sharara field. Elsewhere, natural gas futures (/NGH4) have reversed sharply.



Strategy (35DTE, ATM)

Strikes

POP

Max Profit

Max Loss

Iron Condor

Long 71 p

Short 71.5 p

Short 75.5 c

Long 76 c

22%

+380

-120

Long Strangle

Long 71 p

Long 76 c

45%

x

-4040

Short Put Vertical

Long 71 p

Short 71.5 p

59%

+200

-300

/CLG4

Symbol: FX

Daily Change

/6AH4

+0.23%

/6BH4

+0.25%

/6CH4

+0.06%

/6EH4

+0.19%

/6JH4

-0.46%

The British pound (/6BH4) is higher after traders pushed the currency lower despite ongoing expectations that the Bank of England (BOE) will start cutting rates after the Federal Reserve. The currency’s direction for the rest of the week will likely be decided tomorrow, when U.S. inflation data crosses the wires. BOE Governor Andrew Bailey will speak later today.

Strategy (58DTE, ATM)

Strikes

POP

Max Profit

Max Loss

Iron Condor

Long 1.25 p

Short 1.255 p

Short 1.295 c

Long 1.3 c

43%

+162.50

-150

Long Strangle

Long 1.25 p

Long 1.3 c

36%

x

-681.25

Short Put Vertical

Long 1.25 p

Short 1.255 p

78%

+87.50

-225

/6BH4

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 

For live daily programming, market news and commentary, visit tastylive or the YouTube channels tastylive (for options traders), and tastyliveTrending for stocks, futures, forex & macro.

Trade with a better broker, open a tastytrade account today. tastylive, Inc. and tastytrade, Inc. are separate but affiliated companies.


Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Related Posts

tastylive content is created, produced, and provided solely by tastylive, Inc. (“tastylive”) and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. tastylive is not in the business of transacting securities trades, nor does it direct client commodity accounts or give commodity trading advice tailored to any particular client’s situation or investment objectives. Supporting documentation for any claims (including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.  Options, futures, and futures options are not suitable for all investors.  Prior to trading securities, options, futures, or futures options, please read the applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange-Traded Options Risk Disclosure found on tastytrade.com/disclosures.

tastytrade, Inc. ("tastytrade”) is a registered broker-dealer and member of FINRA, NFA, and SIPC. tastytrade was previously known as tastyworks, Inc. (“tastyworks”). tastytrade offers self-directed brokerage accounts to its customers. tastytrade does not give financial or trading advice, nor does it make investment recommendations. You alone are responsible for making your investment and trading decisions and for evaluating the merits and risks associated with the use of tastytrade’s systems, services or products. tastytrade is a wholly-owned subsidiary of tastylive, Inc.

tastytrade has entered into a Marketing Agreement with tastylive (“Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’s brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade. tastytrade and Marketing Agent are separate entities with their own products and services. tastylive is the parent company of tastytrade.

tastycrypto is provided solely by tasty Software Solutions, LLC. tasty Software Solutions, LLC is a separate but affiliate company of tastylive, Inc. Neither tastylive nor any of its affiliates are responsible for the products or services provided by tasty Software Solutions, LLC. Cryptocurrency trading is not suitable for all investors due to the number of risks involved. The value of any cryptocurrency, including digital assets pegged to fiat currency, commodities, or any other asset, may go to zero.

© copyright 2013 - 2024 tastylive, Inc. All Rights Reserved.  Applicable portions of the Terms of Use on tastylive.com apply.  Reproduction, adaptation, distribution, public display, exhibition for profit, or storage in any electronic storage media in whole or in part is prohibited under penalty of law, provided that you may download tastylive’s podcasts as necessary to view for personal use. tastylive was previously known as tastytrade, Inc. tastylive is a trademark/servicemark owned by tastylive, Inc.