Archive for the ‘Eurodollar Options’ Category
Dec 2. ROLL TIDE
They got a name for the winners in the world I want a name when I lose They call Alabama the Crimson Tide Call me Deacon Blues –Steely Dan, Deacon Blues I couldn’t decide whether to go with ‘Roll Tide’ or ‘Winning’, popularized by Charlie Sheen, for the title to this note. Had to […]
Nov 29. Well played
–The optics are that Trump bullied Powell into changing his stance on forward tightening. It can easily be argued that Trump DID change Powell’s mind, by damaging values of other markets. Was it the Fed’s tightening or Trump’s trade policies that caused a big stock sell -off? Was it tighter US monetary policy that knee-capped oil? […]
Powell flip. It’s amazing what a loss in equity portfolios does for perceptions of “neutral”
Chart below is SPX. When Powell said in an interview on October 3 that the Fed was a long way from neutral, stocks were near the highs. The front WTI Crude Oil contract was over $76/bbl. Now CLF is under $51/bbl. Large declines in both of these markets caused the Fed to re-think it, and […]
Nov 28. Powell – we can monitor financial stability as he speaks
–The event of the day will be Powell’s 12:00pm speech to the Economic Club of NY on ‘monitoring financial stability’. When Dudley was the head of the NY Fed, financial conditions and stability were almost seen as a third mandate for the Fed, now perhaps less important as Powell frequently refers to ‘staying in our […]
Nov 27. Let’s Make a Deal
–Trump again threatened to slap increased tariffs on Chinese goods if no progress is made on a trade deal this weekend. The market yawned. What if, just hypothetically of course, the other side clandestinely gained access to valuable information in The Art of the Deal and sees this gambit as a transparent bluster? What if […]
Animal Spirits – going into hibernation
I spent a lot of money on booze, birds and fast cars. The rest I just squandered. –George Best. Northern Irish footballer who played winger. It’s the thirteenth anniversary of George Best’s death. I’ve always favored the quote above but there are a lot more. It would be easy to get carried away and […]
Nov 22. TY adjustments going into TYZ option expiry
–Large trades in TY options Wednesday as December options expire on Friday. Buying of TYZ 119c in size from 11 to 14, settled 18 vs 119-075, open interest declined by 72k but there were still 104k left. TYF9 121c were bought for 12, settled 14 with an increase of just under 39k. And TYG 121.5c […]
Nov 21. GETTING SCARY
–An eighth day in a row that TYZ settled higher, but just barely. All eurodollar contracts settled slightly lower on the day despite weak equities (SPX -1.8%) and a renewed plunge in oil. Around the time of futures settlement of rates, CLF9 was -3.90 at 53.30, which has been a breathtaking loss from the high […]
Nov 20. Fear moves from a creep to full trot
–For the seventh day in a row, FVZ and TYZ closed higher. Ten year cash yield eased 1.6 bps to 305.6. From the middle of May going into the Italian elections there was also a big decline in yields, from 2.94% to 2.585%, a rapid fall of 35.5 bps. Recent high has been 3.24%, so […]
Nov 19. And….it’s gone!
–Five year note plunged 6 bps to 289.2 Friday, capping a week which saw extreme volatility in energy markets, uncertainty regarding Brexit, and continued stock volatility. ZH notes that a firm named ‘OptionSellers.com’ was blown up by the nat gas move. Yet another premium seller that got caught in a black swan event, which seems […]
