Equity Rally Continues

By Craig Bewick
NOV 16 2020

For the second Monday in a row, US Equity Indexes traded higher on the news of positive developments of a Coronavirus vaccine, this time coming from the Moderna company.  CME Group equity index futures prices rose before the cash equity market opened this morning and remained higher throughout the trading day.  Similar to the action we saw last week, the Dow Jones Industrials and Russell 2000 outperformed the Nasdaq.  In fact, the Dow Jones Industrials Average, S&P 500 and Russell 2000 all hit record high levels.  Also like last week, WTI Crude Oil futures prices rose, up nearly 3% on the day.

Unlike last week however, neither Gold, Silver nor US Treasury futures prices moved significantly today.  All of those futures products saw net changes in price of less than .2%. 

Implied volatility in the CME Group equity index options markets was little changed today.  While it’s come down from recent high levels, historically, it remains elevated, especially given the record high price levels.  We used QuikStrike data to graph price and volatility levels over the last 8 years in the image below.  As you can see from the blue line, prices are at historic high levels.  However, the orange line, which plots 30-day implied volatility, remains significantly above the gray line, which depicts the 8-year average. 


Craig Bewick has spent 25 years in futures and options markets, starting at CBOT and CME working in risk management, regulatory, technology, product management and client development. 

After 8.5 years with WH Trading LLC, Craig returned to CME Group as the Director, Client Development and Sales, working to educate and promote futures trading. Craig currently writes for InFocus Options Corner.

Connect with Craig at activetrader@cmegroup.com

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