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This Week in Futures Options
TWIFO 364: Exploring New Markets for Volatility Traders
Aug 11, 2023
The podcast discusses movers and shakers in the futures options markets, including energy and ags. They explore options trading strategies for Chicago wheat and volatility trading in commodity option markets. Listener feedback on VXX trading is discussed, along with performance and structural problems with VXX. The use of reverse splits in options trading and the attractiveness of leveraged ETFs are also explored.
01:04:48
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Quick takeaways
- The poor performance of the 30-year auction resulted in a significant drop in the value of the future contract, indicating a potential sell-off.
- Skew analysis in the wheat options market suggests a cautious sentiment and anticipation of a price decline, making collar strategies attractive.
Deep dives
The recent 30-year auction did not go well, causing a drop in the future contract value.
The 30-year auction this week resulted in poor performance, leading to a significant drop in the value of the future contract. The future lost almost a full point, declining from 122.5 to 121.5 in just about 10 minutes. Puts in the 118 strike were sold, indicating some anticipation of a potential sell-off. Additionally, put spreads, such as the 118-114 put spread, were executed, suggesting a more bearish outlook for the 30-year contract.
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Discover
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