At-a-Glance

Key Takeaways with Craig

US Equity Prices screamed higher and Treasury yields rose, the day after Donald Trump was declared the winner of the 2024 US Presidential election.  All four major US Indexes traded sharply higher, with the small-cap Russell 2000 leading the gains, up nearly 6%.  Perhaps unsurprisingly, given the apparent resolution of the election, implied volatility in CME’s Equity Index options fell dramatically.  The options that expire tomorrow (and after the FOMC announcement on interest rate policy) remain elevated relative to the more deferred expiries, but well below yesterday’s levels. 

CME’s 10-Year Treasury Yield future was higher by about 14 basis points in late afternoon trading, while CVOL in CME’s Treasury options market fell dramatically.  The FedWatch tool is still pricing in a 25-basis point cut to the Fed Funds target rate at tomorrow’s meeting.  With today’s move higher, the 10-Year Treasury Yield future, at about 4.43, is as high as it’s been since the middle of June. 

Finally, CME’s cryptocurrency futures rallied sharply as well, with the Ether up by nearly 11% and Bitcoin up by about 9.25%, to all-time highs.  Implied volatility fell in the options markets of both Bitcoin and Ether, as might be expected after the uncertainty of the election results was removed.  As we mentioned here in the Key Takeaways section a recently, Bitcoin options continue to trade with a Call skew; however, coinciding with the recent price move higher, Ether options are now trading with a Call skew as well, as you can see in the QuikStrike graph below. 

As we said, the news doesn’t stop with the election, so we’ll be back tomorrow to report on the impact of the conclusion of the FOMC meeting.  


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