Archive for the ‘Eurodollar Options’ Category
Turn those machines back on
March 8, 2022 –The old CME trading floor was rich in hypothetical questions and scenarios. “Would you rather take a bubble bath with x, or have to watch Full Metal Jacket, alone, with y?” (both euro$ option brokers). My memory is a little fuzzy on this next one, I think it was originally just stated […]
Collateral goes bad AND funding is pulled
March 7, 2022 –From Zoltan Pozsar: “Crises happen either because collateral goes bad or funding is pulled away – that’s been the central lesson in every crisis since 1998.” Pozsar’s latest note concerns the stress being felt in commodity markets, with emphasis on the energy sector. I would just note that not only is oil […]
The Equalizer
March 6, 2022 – Weekly comment My brother was looking to buy an equalizer for his stereo system. I don’t even know what an equalizer is. I saw the set up when I went over to his place. Four foot tall speakers, a rack with a tuner, the equalizer, a turntable, stacks of vinyl. I […]
Stress
March 4, 2022 –This morning May Wheat trades 12.09 as the odds of a nuclear accident rose substantially with a fire at the Zaporizhzhia nuclear generation plant in Ukraine. Reportedly now under control, but that name looks suspiciously like “vaporize”. Has wheat ever traded at a premium to beans? May beans currently 16.57. –I was […]
Uncharted waters
March 3, 2022 –Monster reversal of Tuesday’s rally in interest rate futures. The red pack (2nd year forward) fell 27 bps. FFF3 (January FF) fell 30 bps! to 9846.0 or 1.54%, right back to a forecast of 5 or 6 hikes of 25 bps each by year-end, although Powell allowed the possibility of 50 at any […]
I can pay the higher gas price if I can keep the Russian tank for free
March 2, 2022 –The wrenching adjustments that have occurred due to the Ukraine conflict are taking a pause, with stocks bouncing, treasuries easing, gold and grains lower (grain article linked below). However, CLJ2 is above 107/bbl this morning, up $4 from yesterday’s close. In my area, a gallon of regular gas was 3.79 last week […]
One hike disappeared from the radar
March 1, 2022 –Conflict in Ukraine caused significant short covering in the front end Monday, which started with a block buy of 50k EDU2 at 9852.5. Other buy blocks included 20k EDM2 9892.0 and 50k EDH2 9933.5. Open interest was down 29k in EDH2, 49k in EDU2, 78k in EDZ2 and 29k in EDH3 […]
Absorbing the shock
February 28, 2022 Feb 24 highs (Thursday invasion) vs this morning indicate that markets have absorbed the main shock of Putin putting nuclear forces on alert and are adjusting relatively easily. high on 2/24 high todayCLJ2 100.54 99.10TYM2 127-115 […]
The Underdog
February 27, 2022 You got no fear of the underdogThat’s why you will not survive-Spoon, The Underdog The fight is here; I need ammunition, not a ride. On Tuesday, President Biden delivers the State of the Union. He will probably try to reassure the American public that his administration is doing whatever it can to […]
About face
February 25, 2022 –Reversals yesterday were some of the most astonishing I’ve ever seen. Russia’s full scale invasion of Ukraine elicited panic yesterday morning, but stabilized mid-day. SPX was down 2.6% at the low of the day but then closed up 1.5%. Yields plunged but then came back near unchanged, with tens -1.1 bps at […]
