Nasdaq 100 Hits Four-Month High, Oil Tanks as Trump Announces Israel-Iran Ceasefire
Nasdaq 100 Hits Four-Month High, Oil Tanks as Trump Announces Israel-Iran Ceasefire
Also, 30-year T-bond, gold, crude oil and Euro futures
- Nasdaq 100 E-mini futures (/NQ): +1.02%
- 30-year T-bond futures (/ZB): -0.63%
- Gold futures (/GC): -1.99%
- Crude oil futures (/CL): -4.92%
- Euro futures (/6E): +0.1
President Donald Trump announced a tentative ceasefire between Israel and Iran late on Monday, ending the latest chapter in a saga unfolding since October 2023. While the ceasefire may or may not hold, markets are saying the story is finished: Crude oil prices are down more than 16.5% from highs at the start of the week, with oil volatility collapsing to pre-June 12 lows. Similarly, safe havens are being jettisoned, with bonds, gold and the US dollar all weaker. As for stocks? Good news is good news, with each of the S&P 500 and Nasdaq 100 pushing to their highest levels since late- February.
| Symbol: Equities | Daily Change |
| /ESU5 | +0.75% |
| /NQU5 | +1.02% |
| /RTYU5 | +0.76% |
| /YMU5 | +0.79% |
Traders are writing off war risks after the cease fire agreement between Israel and Iran calmed tensions in the region. If the cease fire holds, traders have one less thing to worry about. Nasdaq 100 futures (/NQU5) were up nearly 1% this morning. Lockheed Martin (LMT) fell over 1% in pre-market trading as defense stocks pulled back. Chewy (CHWY) fell 2% ahead of the opening bell after announcing a secondary sale of new shares. Dollar General (DG) dipped 1.75% following a downgrade from Goldman Sachs (GS).
| Strategy: (52DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 20250 p Short 20500 p Short 24250 c Long 24500 c | 65% | +815 | -4185 |
| Short Strangle | Short 20500 p Short 24250 c | 70% | +4530 | x |
| Short Put Vertical | Long 20250 p Short 20500 p | 83% | +535 | -4460 |
| Symbol: Bonds | Daily Change |
| /ZTU5 | -0.04% |
| /ZFU5 | -0.12% |
| /ZNU5 | -0.2% |
| /ZBU5 | -0.63% |
| /UBU5 | -0.74% |
Yesterday’s dip in oi prices sent Treasuries higher as expectations for a Fed interest rate cut grew amid the lowered threat of inflation. However, Federal Reserve Chair Jerome Powell’s testimony to Congress this morning tempered expectations for a rate cut soon. Powell advised patience while the market waits to see how tariffs will affect prices. 30-year T-bond futures (/ZBU5) were down 0.49% ahead of the New York open.
| Strategy (59DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 107 p Short 109 p Short 120 c Long 122 c | 64% | +437.50 | -1562.50 |
| Short Strangle | Short 109 p Short 120 c | 69% | +1109.38 | x |
| Short Put Vertical | Long 107 p Short 109 p | 84% | +234.38 | -1765.63 |
| Symbol: Metals | Daily Change |
| /GCQ5 | -1.99% |
| /SIU5 | -0.81% |
| /HGU5 | +0.91% |
Safe haven demand has eroded after the cease fire agreement between Israel and Iran subdued geopolitical risks in the market. Gold futures (/GCQ5) fell nearly 2% to trade near the June swing lows. If prices drop below 3,300, losses may accelerate, given the technical structure has already weakened significantly, with prices below the 9- and 21-day exponential moving averages (EMAs).
| Strategy (34DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 3125 p Short 3150 p Short 3500 c Long 3525 c | 66% | +610 | -1890 |
| Short Strangle | Short 3150 p Short 3500 c | 72% | +2830 | x |
| Short Put Vertical | Long 3125 p Short 3150 p | 84% | +300 | -2200 |
| Symbol: Energy | Daily Change |
| /CLQ5 | -4.92% |
| /HOQ5 | -3.21% |
| /NGQ5 | -1.43% |
| /RBQ5 | -2.6% |
Crude oil prices (/CLQ5) moved sharply lower to extend Monday’s losses after Israel and Iran agreed to a cease fire. Despite early breaches agreement, it appears to remain in place and tensions appear to be cooling. The threat of a global oil disruption is now largely off the table. Traders are waiting for an inventory report from the American Petroleum Institute (API) as markets refocus on fundamentals for oil prices.
| Strategy (52DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 61.5 p Short 62 p Short 66.5 c Long 67 c | 20% | +380 | -120 |
| Short Strangle | Short 62 p Short 66.5 c | 53% | +5230 | x |
| Short Put Vertical | Long 61.5 p Short 62 p | 56% | +210 | -290 |
| Symbol: FX | Daily Change |
| /6AU5 | +0.69% |
| /6BU5 | +0.58% |
| /6CU5 | +0.25% |
| /6EU5 | +0.1% |
| /6JU5 | +0.74% |
Euro futures (/6EU5) rose today as appetite for the dollar diminished following the truce between Israel and Iran. Fed rate cut bets increased slightly after some dovish signals from Fed members. Meanwhile, European Central Bank (ECB) President Christine Lagarde expressed concern over the economic outlook in Europe. Still, investors seem ready to push the euro higher despite those misgivings. The euro now faces resistance from the June swing high at 1.1704.
| Strategy (45DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
| Iron Condor | Long 1.155 p Short 1.16 p Short 1.18 c Long 1.185 c | 28% | +425 | -250 |
| Short Strangle | Short 1.16 p Short 1.18 c | 56% | +2262.50 | x |
| Short Put Vertical | Long 1.155 p Short 1.16 p | 69% | +225 | -400 |
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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