Nasdaq 100 and Russell 200 Rally, and Oil Drops as Trump Seeks Iran Negotiation
Nasdaq 100 and Russell 200 Rally, and Oil Drops as Trump Seeks Iran Negotiation
Nasdaq 100 and Russell 200 Rally, and Oil Drops as Trump Seeks Iran Negotiation
- Russell 2000 E-mini futures (/RTY): +0.54%
- 10-year T-note futures (/ZN): -0.08%
- Silver futures (/SI): -2.69%
- Crude oil futures (/CL): -0.59%
- British pound futures (/6B): +0.57%
President Donald Trump will decide on striking Iran within the next “two weeks,” according to the White House. Absent immediate escalation, markets are taking a beat to ratchet down “the war trade,” with stocks higher while bonds, metals and energy are weaker. That’s not to mention the $5.9 trillion of options expiring today, which makes for the largest June options expiry ever.
| Symbol: Equities | Daily Change |
| /ESU5 | +0.43% |
| /NQU5 | +0.63% |
| /RTYU5 | +0.53% |
| /YMU5 | +0.31% |
US equity markets are pushing higher on the other side of the federal holiday, buttressed by a drop in volatility (spot VIX back below 20 after the US cash equity open). The Nasdaq 100 (/NQU5) and the Russell 2000 (/RTYU5) have been jostling for the pole position overnight, even as Treasury yields push higher (higher for a good reason, one might say). As the week has pushed forward, it’s worth noting that nearly 80% of S&P 500 companies have entered their buyback blackout window, which will run through late July.
| Strategy: (41DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 1900 p Short 1925 p Short 2350 c Long 2375 c | 65% | +175 | -1075 |
| Short Strangle | Short 1925 p Short 2350 c | 68% | +910 | x |
| Short Put Vertical | Long 1900 p Short 1925 p | 83% | +105 | -1145 |
| Symbol: Bonds | Daily Change |
| /ZTU5 | 0% |
| /ZFU5 | -0.03% |
| /ZNU5 | -0.08% |
| /ZBU5 | -0.28% |
| /UBU5 | -0.29% |
As the window for negotiations between the US and Iran remain open, traders have relaxed their bets today on safe haven assets. US Treasuries are down across the curve, if only modestly — less by weakness as the long-end of the curve. It’s likewise worth noting that 10s (/ZNU5) haven’t done much of anything for many months now; directionless, rangebound trading persists, even if traders are wanting for more volatility.
| Strategy (35DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 107.5 p Short 108.5 p Short 112.5 c Long 113.5 c | 64% | +218.75 | -781.25 |
| Short Strangle | Short 108.5 p Short 112.5 c | 68% | +437.50 | x |
| Short Put Vertical | Long 107.5 p Short 108.5 p | 88% | +93.75 | -906.25 |
| Symbol: Metals | Daily Change |
| /GCQ5 | -0.97% |
| /SIN5 | -2.69% |
| /HGN5 | -0.36% |
A strong start to the week for the metals complex is ending on a whimper. Silver prices (/SIN5) draw our interest, given their surge early this week to their highest level sine February 2012, only for the gains to be negated by today’s price action. As ever, volatility may be the tell: Over the course of the week, both gold and silver volatility has contracted, which we’ve previously observed as a contemporaneous indicator for weakness in the metals since October 2023.
| Strategy (38DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 32.5 p Short 33 p Short 39 c Long 39.5 c | 66% | +590 | -1910 |
| Short Strangle | Short 33 p Short 39 c | 72% | +2700 | x |
| Short Put Vertical | Long 32.5 p Short 33 p | 83% | +235 | -2265 |
| Symbol: Energy | Daily Change |
| /CLQ5 | -0.59% |
| /HON5 | +1.74% |
| /NGN5 | -0.78% |
| /RBN5 | -0.03% |
The war drums continue to beat, with missiles flying from Tehran to Tel Aviv and threats to close the Strait of Hormuz. That said, energy markets are taking a breather thus far today as Iranian negotiators arrive in Geneva to talk with European counterparts. Crude oil prices (/CLQ5) have proved jumpy to headlines over the course of the session, but perhaps the most notable development is the ongoing contraction in oil volatility: IVR has dropped from a high of 142.22 on Tuesday to 91.5 today.
| Strategy (56DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 56 p Short 58 p Short 88 c Long 90 c | 64% | +450 | -1550 |
| Short Strangle | Short 58 p Short 88 c | 72% | +3110 | X |
| Short Put Vertical | Long 56 p Short 58 p | 82% | +240 | -1760 |
| Symbol: FX | Daily Change |
| /6AU5 | -0.22% |
| /6BU5 | +0.57% |
| /6CU5 | -0.17% |
| /6EU5 | +0.36% |
| /6JU5 | -0.46% |
The biggest retail sales miss for the UK since May 2023 was overshadowed by data showing that the that country’s government is borrowing less money than anticipated, leading to a better fiscal situation than expected just a few months ago. In turn, the British pound (/6BU5) has been able to ward off any weakness, particularly after the Monetary Policy Committee of the Bank of England announced yesterday it will keep the main rate on hold at 4.25%.
| Strategy (49DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 1.305 p Short 1.31 p Short 1.38 c Long 1.385 c | 62% | +93.75 | -218.75 |
| Short Strangle | Short 1.31 p Short 1.38 c | 69% | +475 | x |
| Short Put Vertical | Long 1.305 p Short 1.31 p | 89% | +43.75 | -268.75 |
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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