Treasury Yields Up, Bitcoin Prices Up, Natural Gas Prices Up, Gold Prices Down

By Craig Bewick
FEB 16 2021

Due to a scheduling conflict, we’re writing the Key Takeaways section a bit earlier today, but as of midday trading, Equity markets were rather quiet while interest rates (particularly longer term Treasuries), Bitcoin and energies (particularly Natural Gas) stole the headlines. 

  • As of this writing, Bitcoin futures were trading “only” up about 1% but had traded at a price of over 50,000 for the first time earlier in the day
  • Natural Gas futures prices, which we’ve written about here in the Key Takeaways section recently, were up another 7% today.  This probably isn’t too surprising as the cold weather that has blanketed most of the country has been the subject of both financial and mainstream headlines.  Despite the rally however, implied volatility in the Nat Gas options markets fell today and the Puts were actually bid versus the Calls
  • At the longer end of the yield curve, CME Group’s US T-Bond price is down by about 1.5 points and the Ultra T-Bond is down by over 3 points.  Those price moves translate to a move of approximately 8 basis points higher in the implied yield of those two instruments.  With the price decline, we saw a spike in implied volatility in the options markets as you can see in the blue line in the QuikStrike graph below.  Additionally, the Puts were bid versus the Calls as Put sellers demanded more premium against a further decline in prices
  • Gold futures prices were down about 1.5% while volatility in the options increased

Remember to be on the lookout for our first “Question of the Day” this week that will enable our readers to enter to win a gift card!

ABOUT THE AUTHOR

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. 

Connect with Craig at activetrader@cmegroup.com

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