icon
Denver—Only 24 Hours Left to Register to see Tom & Tony Live!
tastylive logo
uploaded image

S&P 500 Shakes Off US Bombing of Iran — Crude Oil and Natural Gas Give Up Gains

By:Christopher Vecchio, CFA

Also, 10-year T-note, gold, crude oil and Japanese yen futures

S&P 500, 10-year T-note, gold, crude oil, Japanese yen futures
S&P 500, 10-year T-note, gold, crude oil, Japanese yen futures

  1. S&P 500 E-mini futures (/ES): +0.3% 
  2. 10-year T-note futures (/ZN): +0.2% 
  3. Gold futures (/GC): +0.38% 
  4. Crude oil futures (/CL): -0.08% 
  5. Japanese yen futures (/6J): -0.86% 

The shocking news over the weekend may not be that shocking after all — at least for the markets. While the US bombing of Iranian nuclear facilities provoked opening gaps by the time the futures market reopened on Sunday night, traders have shrugged off the opening prints. Crude oil prices, up over 5% at the open, are now in negative territory on the day. Likewise, natural gas prices (Iran produce s 6% of global supply) have erased their gains. US equity markets are firming up as the session proceeds, while bonds are up. Will Iran close the Strait of Hormuz? Traders are saying no. 

Symbol: Equities Daily Change 
/ESU5 +0.3% 
/NQU5 +0.33% 
/RTYU5 +0.05% 
/YMU5 +0.28% 

The brief bout of volatility that hit the tape at the futures open at the start of the week has since evaporated; IVRs for the major US equity indexes are on the cusp of hitting their lowest levels since Israel and Iran began their war on June 12. The S&P 500 (/ESU5) and Nasdaq 100 (/NQU5) have been competing for the spot of top performer, which absent a broader regional or global conflict, makes sense: How much revenue do American companies derive from Iran? The answer won't surprise you: around 0.003%, according to publicly available data.

Strategy: (46DTE, ATM) Strikes POP Max Profit Max Loss 
Iron Condor  

Long 5500 p 

Short 5600 p 

Short 6400 c 

Long 6500 c 

63% +875 -4125 
Short Strangle 

Short 5600 p 

Short 6400 c 

67% +2862.50 
Short Put Vertical 

Long 5500 p 

Short 5600 p 

86% +450 -4550 

S&P 500, (/ESU5)
S&P 500, (/ESU5)
Symbol: Bonds Daily Change 
/ZTU5 +0.04% 
/ZFU5 +0.13% 
/ZNU5 +0.2% 
/ZBU5 +0.38% 
/UBU5 +0.48% 

Bonds may be getting a latent safe haven bid, although given broader cross-asset performances, one might surmise that traders are looking at the collapse in oil prices and instead reducing inflation expectations across the Treasury curve (especially at the long-end, with 10s (/ZNU5) and 30s (/ZBU5) gathering pace). The short-end and belly of the curve are in focus over the coming days, with two-, five- and seven-year Treasuries on the auction bloc Tuesday through Thursday, respectively.  

Strategy (32DTE, ATM) Strikes POP Max Profit Max Loss 
Iron Condor  

Long 108.5 p 

Short 109.5 p 

Short 113.5 c 

Long 114.5 c 

67% +203.13 -796.88 
Short Strangle 

Short 109.5 p 

Short 113.5 c 

71% +421.88 
Short Put Vertical 

Long 108.5 p 

Short 109.5 p 

86% +109.38 -890.63 

10 year t-note, (/ZNU5)
10 year t-note, (/ZNU5)
Symbol: Metals Daily Change 
/GCQ5 +0.38% 
/SIN5 +0.44% 
/HGN5 -0.17% 

The rebound in risk appetite over the course of the morning is doing little favor to the metals, which one might argue are proving sluggish. After all, with central banks buying gold at a torrid clip and geopolitical instability at the highest levels since the peak of the first Cold War (it’s this analyst’s opinion we’re in a very warm phase of Cold War II). But shouldn’t gold be doing better? Narrative aside, the technicals remain a reliable guide: gold prices (/GCQ5) has closed above their one-month moving average (daily 21-EMA) every session since May 20. 

Strategy (35DTE, ATM) Strikes POP Max Profit Max Loss 
Iron Condor  

Long 3175 p 

Short 3200 p 

Short 3575 c 

Long 3600 c 

68% +600 -1900 
Short Strangle 

Short 3200 p 

Short 3575 c 

74% +3170 
Short Put Vertical 

Long 3175 p 

Short 3200 p 

86% +280 -2200 

Gold futures, (/GCQ5)
Gold futures, (/GCQ5)
Symbol: Energy Daily Change 
/CLQ5 -0.08% 
/HOQ5 -0.21% 
/NGQ5 -2.47% 
/RBQ5 +0.08% 

A remarkable turn in energy prices since the Sunday open now sees crude oil prices (/CLQ5) and natural gas prices (/NGQ5) in the red for the day. The US strike on Iran stirred fears that the Iranian Navy would mine and blockade the Strait of Hormuz, a long-held threat dating back to the Tanker Wars of the 1980s. Here’s the rub: the major shipping lanes through the Strait of Hormuz now run through Oman’s territorial water. Iran would have to restart the Tanker Wars to have a material impact, but consider this: If Iran blocks Gulf states from oil trade, retaliation against Iranian export facilities is almost guaranteed. IVR for crude oil is at its lowest level since the Israel-Iran war began. 

Strategy (53DTE, ATM) Strikes POP Max Profit Max Loss 
Iron Condor  

Long 56 p 

Short 58 p 

Short 88 c 

Long 90 c 

65% +390 -1610 
Short Strangle 

Short 58 p 

Short 88 c 

71% +2450 
Short Put Vertical 

Long 56 p 

Short 58 p 

83% +210 -1790 

Light sweet crude oil, (/CLQ5)
Light sweet crude oil, (/CLQ5)
Symbol: FX Daily Change 
/6AU5 -0.8% 
/6BU5 -0.27% 
/6CU5 -0.22% 
/6EU5 -0.35% 
/6JU5 -0.86% 

Demand for the US dollar remains firm on the other side of the weekend, with the notable loser emerging as the Japanese yen (/6JU5). Typically, the yen enjoys haven flows during periods of geopolitical distress, but it’s worth noting that as an island nation that imports over 90% of its energy, volatility in energy prices have explicit downstream impacts for the currency and inflation. That’s not to mention that positioning in the yen remains extreme: Relative to the past 20 years, speculative yen long positioning has a Z-score of +2.937. 

Strategy (46DTE, ATM) Strikes POP Max Profit Max Loss 
Iron Condor  

Long 0.00655 p 

Short 0.0066 p 

Short 0.0071 c 

Long 0.00715 c 

67% +162.50 -462.50 
Short Strangle 

Short 0.0066 p 

Short 0.0071 c 

73% +637.50 
Short Put Vertical 

Long 0.00655 p 

Short 0.0066 p 

89% +62.50 -562.50 

Japanese yen/US Dollar, (/6JU5)
Japanese yen/US Dollar, (/6JU5)

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 Westwatera 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 brokeropen 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 - 2025 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.