Manage Trade War Outcomes in Global Markets

The trade war has disrupted markets, from equities to commodities and more. Discover insights into market volatility and stay ahead of trade war curve with CME Group’s economic research, analytical tools and educational courses—all in one place.

Tracking Market Expectations

Monitor how the trade war influences market expectations, focusing on options volatility to make informed decisions about event risk. As effects of the trade war shift the markets, watch forecasts for future movements, review historical markets or use CME Group’s tools to do more analysis.

Soybean Options

As of February 7, 2019, the market forecasts a 68% chance that Soybean prices will move no more than 35 cents through the March 1 trade war deadline.

Relevant contract: May Soybean futures 

Chart data compiled using the Vol2Vol Expected Range tool. To build your own chart or do your own analysis take a look at the Vol2Vol Expected Range Tool. 

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Implied Volatility

Looking at historical May Soybean implied volatility going back to 2007, it seems the options market does not believe the trade war will create additional volatility in the Soybean marketplace through April.

Chart data compiled using the Historical Implied Volatility tool in QuikStrike. To build your own charts or do your own analysis, sign up for QuikStrike.  

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Crude Oil Options

Due to the impending trade war decision on March 1, the energy options market is pricing in a 4% volatility spike from February 22 until March 1.

Relevant contract: Week 1 Weekly Crude Oil options expire March 1

Chart data compiled using the Economic Event Volatility Calculator. To build your own charts or do your own analysis, take a look at the Event Volatility Calculator.  

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Impacts to Major Markets

Agriculture

U.S. soybean prices are at a greater risk than corn due to the larger global market share of soybean exports from the U.S. compared to production.

To manage risk, consider the deep liquidity of CME Group Agricultural futures and options markets. Specifically, Soybean weekly options have seen a strong volume increase, especially the Week 1 Soybean option, which expires March 1.

Read the latest.

Equity Indices

Global growth fears and uncertainty around corporate earnings have created turmoil in the equity markets.

CME Group offers a few ways to manage the uncertainty, with spread opportunities in small-cap versus large-cap indices or Select Sector futures to hedge your portfolio.

Read the latest.

Energy

Signs of slower growth in China have impacted global energy demand. Despite lower demand, oil prices have risen as OPEC and its partner producers have curbed their output.

The stronger U.S. dollar is also making crude oil more expensive for consumer countries. These rising prices risk further dampening emerging market demand.

Read the latest.

Metals

Economic growth in China is major demand factor in industrial metals markets, such as steel, copper and aluminum.

U.S. tariffs imposed in 2018 on steel and aluminum imports have affected prices and trade flows.

Further actions, or reactions, in trade policy will likely continue to impact both local and global metals markets. Protect against this risk with CME Group futures and options on major industrial metals.

Manage Event Risk with Short-Term Options

Take a look at contracts that expire March 1 for products impacted by the trade war.

As you prepare to handle event risk around the March 1 U.S./China trade war decision, short-term options offer a strong risk management strategy for high-impact events.

View Weekly Options Vendor Codes

Clearing Globex ClearPort Product Name Exchange Product Group Cleared As Volume Open Interest
TY1 ZN1 TY1 10-Year T-Note Weekly Options Wk 1 CBOT Interest Rate Options 95,348 147,246
EW1 EW1 EW1 E-mini S&P 500 Weekly Options Wk 1 CME Equities Options 55,171 124,987
US1 ZB1 US1 U.S. Treasury Bond Weekly Options Wk 1 CBOT Interest Rate Options 30,431 57,063
PY1 ZC1 PY1 Corn Weekly Options Wk 1 CBOT Agriculture Options 19,261 18,514
LO1 LO1 LO1 Crude Oil Weekly Options Wk 1 NYMEX Energy Options 3,333 5,335
QN1 QN1 QN1 E-mini Nasdaq-100 Weekly Options Wk 1 CME Equities Options 1,918 4,683
CZ1 ZS1 CZ1 Soybean Weekly Options Wk 1 CBOT Agriculture Options 1,369 1,271
WZ1 ZW1 WZ1 Chicago SRW Wheat Weekly Options Wk 1 CBOT Agriculture Options 251 1,089
R1E R1E R1E E-mini Russell 2000 Weekly Options - Wk 1 CME Equities Options 269 520
YM1 YM1 YM1 E-mini Dow ($5) Weekly Options Wk 1 CBOT Equities Options 2 4
Trade Date: 22 Feb 2019 | PRELIMINARY

Dive Deeper into Trading Around Event Risk

Whether you are getting to know the futures and options markets, or are an experienced trader looking for new ideas, CME Institute provides in-depth information on a variety of trading topics. Get started with a few courses that will help prepare you for event-driven changes in the market:

Key Economic Events - Learn how economic events can move markets and what to watch to make the most of your trading strategy.

Strangles - Get an overview of strangles as a trading strategy for options, including benefits of the strategy and more.

Straddles - Look at straddles as a strategy for trading options in volatile or stagnate markets.

Strategy Simulator - Take your learning to the next level and see how custom-built strategies perform in different price scenarios.

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