Precious Metals Futures Prices Rise; Cryptocurrencies Fall

By Craig Bewick
MAY 17 2021

US Equity Index prices fell to begin the week, but after a late day rally, closed off of the day’s lows.  Implied volatility in CME Group’s Equity Index options markets ticked up slightly.  Concerns regarding potential inflationary pressures in the US seem to persist and, even though longer term US Treasury futures prices were near steady on the day, Gold and Silver prices both rallied.  Both precious metals hit prices we haven’t seen in over 3 months today and implied volatility in the options markets has risen from recent low levels. 

Cryptocurrencies were broadly lower today after Elon Musk tweeted about Bitcoin again yesterday.  CME Group lists futures on Bitcoin and Ether, which were down 12% and 16% respectively from Friday’s close.  Remember, on May 3rd CME Group launched Micro Bitcoin futures which represent the notional value of 1/10 of one Bitcoin and today we saw over 50,000 contracts trade.  With the price break in Bitcoin futures, we also saw a spike in implied volatility, up to nearly 110% from just about 65% just a couple of weeks ago, as you can see in the top QuikStrike graph below.  We also saw the Puts catch a bid versus the Calls, as you can see in the lower graph below that depicts the implied volatility of the 25 Delta Calls minus that of the Puts.   


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. 

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