Nasdaq 100 Slips, Oil Surges to Start October as Iran Readies Missile Barrage
Nasdaq 100 Slips, Oil Surges to Start October as Iran Readies Missile Barrage
Also, 30-year T-bond, silver, natural gas and Japanese yen futures
Nasdaq 100 E-mini futures (/NQ): -1.4%
30-year T-bond futures (/ZB): +1.06%
Silver futures (/SI): +1.17%
Natural gas futures (/NG): -0.41%
Japanese yen futures (/6J): +0.25%
Reports from the White House suggest Iran is readying a missile barrage against Israel as a response to the recent deaths of Hezbollah leadership. Financial markets are on their risk-off war footing, with bonds, precious metals and oil rallying while stocks are sold off. Nevertheless, this played out similarly in mid-April: Ultimately, the washing-over of geopolitical risk paved the way for a rebound in risk appetite that lasted through mid-July.
Symbol: Equities | Daily Change |
/ESZ4 | -0.91% |
/NQZ4 | -1.4% |
/RTYZ4 | -1.46% |
/YMZ4 | -0.63% |
Nasdaq futures (/NQZ4) was slightly higher this morning to kick off October and fourth-quarter trading. The tech-heavy index put in its first monthly gain for the month of September since 2019, rising over 3% on the month. Cerebras Systems filed for an initial public offering (IPO) yesterday and will trade under the ticker symbol CBRS. The chipmaker is seen as a potential Nvidia (NVDA) challenger.
Strategy: (30DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 19600 p Short 19700 p Short 20200 c Long 20250 c | 62% | +1100 | -900 |
Short Strangle | Short 19700 p Short 20200 c | 55% | +13520 | X |
Short Put Vertical | Long 19600 p Short 19700 p | 61% | +630 | -1370 |
Symbol: Bonds | Daily Change |
/ZTZ4 | +0.1% |
/ZFZ4 | +0.33% |
/ZNZ4 | +0.52% |
/ZBZ4 | +1.06% |
/UBZ4 | +1.39% |
A better-than-expected report on job openings helped to push bond prices higher this morning, with the job openings and labor turnover survey (JOLTS) showing job openings above 8 million. The underlying yield for the 30-year T-bond futures (/ZBZ4) is nearing the 4% level, its lowest since mid-September. Federal Reserve Chair Jerome Powell’s comments yesterday made clear the Fed remains on a data-dependent path but also noted his support for two more rate cuts, helping to push yields lower.
Strategy (52DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 123 p Short 124 p Short 127 c Long 128 c | 27% | +718.75 | -281.25 |
Short Strangle | Short 124 p Short 127 c | 57% | +3500 | X |
Short Put Vertical | Long 123 p
| 66% | +359.38 | -640.63 |
Symbol: Metals | Daily Change |
/GCZ4 | +0.96% |
/SIZ4 | +1.17% |
/HGZ4 | +0.72% |
Silver futures rose to start the month this morning after coming off a very strong September when prices rose nearly 8% for the best gain since May. The drop in yields amid strong indicators for the U.S. labor market helped to prop up the metal this morning. Last week’s data from the Commodity Futures Trading Commission CFTC) showed longs outpaced short speculators, with the net position for non-commercials at about 62,000 to the long side.
Strategy (55DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 30.75 p Short 31 p Short 33.25 c Long 33.5 c | 24% | +940 | -310 |
Short Strangle | Short 31 p
| 58% | +11855 | x |
Short Put Vertical | Long 30.75 p Short 31 p | 58% | 585 | -660 |
Symbol: Energy | Daily Change |
/CLZ4 | +3.34% |
/HOZ4 | +1.82% |
/NGZ4 | -0.41% |
/RBZ4 | +1.73% |
After a 17% gain in September, natural gas futures (/NGX4) pulled back to start October. Traders have pushed prices to the highest levels traded since July, as the summer injection season saw the storage surplus vs. the one- and five-year averages decrease over the last month on light injections. Now, production is below 100 billion cubic feet per day (Bcf/d). Pipeline flow data indicates production might pick up over the short term, but prices look biased higher as we enter October.
Strategy (55DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 2.8 p Short 2.85 p Short 3.05 c Long 3.1 c | 15% | +420 | -80 |
Short Strangle | Short 2.85 p Short 3.05 c | 58% | +5100 | X |
Short Put Vertical | Long 2.8 p Short 2.85 p | 72% | +140 | -360 |
Symbol: FX | Daily Change |
/6AZ4 | -0.35% |
/6BZ4 | -0.51% |
/6CZ4 | +0.17% |
/6EZ4 | -0.47% |
/6JZ4 | +0.25% |
Japanese yen futures (/6JZ4) moved slightly higher to start the month after a set of economic data crossed the wires along with the Bank of Japan’s summary of opinions from its latest policy meeting. Retail sales pointed to some strength in the country’s consumer sector, and the minutes showed policy makers remain cautious but ready to hike rates further. But it doesn’t appear they are in a hurry.
Strategy (38DTE, ATM) | Strikes | POP | Max Profit | Max Loss |
Iron Condor | Long 0.00695 p Short 0.007 p Short 0.00715 c Long 0.0072 c | 27% | +475 | -150 |
Short Strangle | Short 0.007 p Short 0.00715 c | 58% | +2325 | X |
Short Put Vertical | Long 0.00695 p Short 0.007 p | 63% | +275 | -350 |
Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx
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