Key Takeaways with Craig

US Equity prices struggled to find a solid direction for most of the trading day after the CPI release indicated the highest rate of inflation we’ve seen in 40 years but also in line with consensus expectations.  The major indexes were trading slightly higher at the time of this writing while implied volatility in the index options at CME was nearly unchanged from yesterday.  US Treasury yields were little changed on the day as well. 

Currency markets at CME Group were active as the futures price of several major currencies reached multi-month highs against the US Dollar.  The Euro, Australian Dollar, Canadian Dollar and Pound futures prices all hit levels not seen since mid-November of last year. 

Finally, Natural Gas, which we wrote about extensively in 2021 due to the historic price and implied volatility levels at which it traded, was up by over 13.5% today, reportedly on a forecast for colder weather and supply concerns.  As you can see in the upper QuikStrike graph below, after somewhat normalizing at the end of last year, the futures price is up by over 20% in the first couple weeks of 2022 and 30-Day implied volatility in the options markets is trading back up over 70%.  The lower graph is a depiction of Nat Gas options skew in the form of the 25 Delta Risk Reversal.  As you can see, in the last week, the Calls have increased from trading about 5% over the Puts to the current levels of about 13.5% over the Puts as traders are willing to pay relatively more for upside price exposure.  

Today's Future Price Action

Traders Resources

The information in the market commentaries have been obtained from sources believed to be reliable, but we do not guarantee its accuracy and expressly disclaim all liability. Neither the information nor any opinions expressed therein constitutes a solicitation of the purchase or sale of any futures or options contracts. The information on this site compiled by CME Group is for general purposes only. All information and data herein is provided as-is. Additionally, all examples on this site are hypothetical situations, used for explanation purposes only, and should not be considered investment advice or the results of actual market experience. CME Group assumes no responsibility for any errors or omissions. CME Group, its affiliates and any third party information and content providers expressly disclaim all liability with respect to the information and data contained herein including without limitation, any liability with respect to the accuracy or completeness of any data. You use the data herein solely at your own risk. All data and information provided herein is not intended for trading purposes or for trading advice. All matters pertaining to rules and specifications herein are made subject to and superseded by official CME, CBOT, NYMEX and COMEX rules. Current rules should be consulted in all cases concerning contract specifications.

Neither futures trading nor swaps trading are suitable for all investors, and each involves the risk of loss. Due to the leveraged nature of futures trading and swaps trading, it is possible to lose more than the amount deposited in a position. Therefore, traders should not deposit more funds than they can afford to lose without negatively affecting their lifestyles. A trader cannot expect to profit on each trade, and should only devote a small amount of their available funds to each trade. All references to options refer to options on futures.

Past performance is not necessarily indicative of future performance.

CME Group, the Globe Logo, Chicago Mercantile Exchange, Globex and CME are trademarks of Chicago Mercantile Exchange Inc. CBOT is the trademark of the Board of Trade of the City of Chicago, Inc. NYMEX is the trademark of the New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other marks are the property of their respective owners. Each of Chicago Mercantile Exchange Inc. (ARBN 103 432 391), The Board of Trade of the City of Chicago Inc (ARBN 110 594 459), the New York Mercantile Exchange Inc (ARBN 113 929 436) and Commodity Exchange, Inc. (ARBN 622 016 193) is a registered foreign company in Australia and holds an Australian market licence.

This site does not constitute a prospectus, product disclosure statement or legal advice, nor is it a recommendation to buy, sell or retain any specific investment or to utilise or refrain from utilising any particular service. Readers should consult their legal advisors for legal advice in connection with the matters covered on this site.

CME Group is the world’s leading derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). 
Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.

© 2024 CME Group Inc. All rights reserved.