Nasdaq Trims Early Losses Following Asian Equity Sell Off
Nasdaq Trims Early Losses Following Asian Equity Sell Off
Also 30-year T-Note, Copper, Crude Oil, and Japanese Yen Futures
- Nasdaq 100 E-mini futures (/NQ): +0.26%
- 30-year T-note futures (/ZB): +0.03%
- Copper futures (/HG): -0.46%
- Crude oil futures (/CL): -2.23%
- Japanese yen futures (/6J): -0.49%
U.S. equity futures traded mostly lower overnight as volatility swept through Chinese markets. Still, stocks came off of their lows in early morning trading. China's Shenzhen Index fell almost 9% for its worst single-day performance in nearly 30 years. Volatility remains elevated, with the CBOE Volatility Index (VIX) remaining above the 20 handle. The dollar rose amid the move to safe-haven assets, and bond market volatility remains inflated.
Symbol: Equities | Daily Change |
/ESZ4 | +0.09% |
/NQZ4 | +0.26% |
/RTYZ4 | +0.32% |
/YMZ4 | +0.46% |
Nasdaq futures (/NQZ4) fell this morning by about 0.18% ahead of the opening bell. But traders trimmed those losses in the first 30 minutes of trading. The U.S. Department of Justice signaled it will consider a breakup of Alphabet (GOOGL), with lawyers representing the government telling a federal judge of such plans last night. Boeing (BA) fell nearly 2% in pre-market trading after withdrawing a salary offer with the machinists union, putting talks at an impasse for now. Reddit (RDDT) rose 3% after scoring a buy rating from Jefferies, who initiated coverage of the stock. Disney (DIS) fell 0.5% as it closes its Florida theme parks with Hurricane Milton barrels toward Florida.
Strategy: (51DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 19900 p Short 20000 p Short 20700 c Long 20750 c | 59% | +1120 | -880 |
Short Strangle | Short 20000 p Short 20700 c | 50% | +18280 | x |
Short Put Vertical | Long 19900 p Short 20000 p | 58% | +665 | -1335 |
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Symbol: Bonds | Daily Change |
/ZTZ4 | -0.02% |
/ZFZ4 | -0.05% |
/ZNZ4 | -0.07% |
/ZBZ4 | +0.03% |
/UBZ4 | +0.10% |
Treasury futures moderated in early morning trading, with the 30-year T-bond futures contract (/ZBZ4) rising about 0.03% before the New York open. The Ice BofA Move Index (MOVE) remains at its highest levels since January, as traders digest last week’s economic information. That data, mainly Friday’s jobs numbers, has subdued bets on a Federal Reserve cut in interest rates—with a small chance of no change in rates being priced in for the November Fed meeting.
Strategy (44DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 119 p Short 120 p Short 123 c Long 124 c | 30% | +703.13 | -296.88 |
Short Strangle | Short 120 p
| 57% | +3062.50 | x |
Short Put Vertical | Long 119 p Short 120 p | 64% | +375 | -625 |
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Symbol: Metals | Daily Change |
/GCZ4 | -0.27% |
/SIZ4 | +0.11% |
/HGZ4 | -1.72% |
Copper futures continued to fall today, dropping 1.72%, with hopes for a big stimulus in China deflated following the disappointing press conference earlier this week with China’s economic planners. The disappointment bled over into Chinese equity markets, which plummeted overnight. The hopes for solid fiscal measures appear to be dead for now, which will likely weigh on copper prices over the short term.
Strategy (47DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 4.29 p Short 4.3 p Short 4.49 c Long 4.5 c | 20% | +200 | -50 |
Short Strangle | Short 4.3 p Short 4.49 c | 54% | +5125 | x |
Short Put Vertical | Long 4.29 p Short 4.3 p | 59% | +112.50 | -137.50 |
Symbol: Energy | Daily Change |
/CLX4 | -2.23% |
/HOZ4 | -1.95% |
/NGZ4 | -2.41% |
/RBZ4 | +2.47% |
The China narrative is weighing on oil prices as well. Crude oil futures (/CLX4) fell 1.43% this morning. Tensions in the Middle East remain high, but the broader macro picture has failed to provide support to the market. The American Petroleum Institute (API) reported an 11 million barrel build in crude inventories for last week, beating expectations. The Energy Information Administration (EIA) downgraded its 2025 demand forecast, putting more pressure on the fundamental outlook for prices.
Strategy (37DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 69 p Short 69.5 p Short 74 c Long 74.5 c | 19% | +390 | -110 |
Short Strangle | Short 69.5 p Short 74 c | 53% | +5650 | x |
Short Put Vertical | Long 69 p Short 69.5 p | 55% | +230 | -270 |
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Symbol: FX | Daily Change |
/6AZ4 | -0.30% |
/6BZ4 | -0.10% |
/6CZ4 | -0.14% |
/6EZ4 | -0.14% |
/6JZ4 | -0.49% |
Japanese yen futures (/6JZ4) continue to sell today as traders move into the dollar after an overnight sell-off in Chinese equity markets. The safe-haven move saw traders bet on the dollar and cut bets on Fed rate cuts, with Fed funds futures now showing a chance for no rate change in November. Meanwhile, the Bank of Japan seems uncertain on the pace of potential rate hikes. Will intervention fears return? Atsushi Mimura, Japan’s vice finance minister, warned the market over speculating in FX markets this week.
Strategy (30DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.006675 p Short 0.0067 p Short 0.00685 c Long 0.006875 c | 29% | +225 | -87.50 |
Short Strangle | Short 0.0067 p Short 0.00685 c | 58% | +1637.50 | x |
Short Put Vertical | Long 0.00675 p Short 0.0067 p | 65% | +125 | -187.50 |
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Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
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