The Futures Options Roundtable

Futures Options Roundtable 17: The Year in Futures Options

Futures Options Roundtable 2014 Year in Review

 

The ongoing oil drama of 2014: Oil hits 5-year low today. Oil volatility and option volume seem poised to remain elevated in early 2015. Crude oil volatility skew: OTM call premiums remain comparatively cheap. Mini WTI futures, ICE Brent futures, Nadex oil rundown.

Gold futures fell for the fourth time in five sessions as the dollar touched a five-year high. Gold is headed for a second straight annual loss for the first time since 1998.

Silver futures for March delivery retreated 2.3 percent to $15.779 an ounce on the Comex, the most in almost two weeks.

Copper reaches four-year low in London on China slowdown.

Corn - Call premium total: $207,143.75, Put premium total: $403,637.50. Call OI Total: 205,195, Put OI Total: 248,323.

Wheat - Ukraine crisis has been a driver for wheat volatility and volume this year.

Rates - 30-Year futures: 86.4M contracts through Nov, down 6.8%. 10-Year futures: 317.5M contracts through Nov, up 3%.

Looking Ahead To 2015

 

Hopefully seeing more inflows to commodities in 2015?

Futures Options Roundtable 16: Crazy Crude Oil Action 

The Grand Marketplace: Crude futures activity rundown. Binary options. Gold and silver futures rose to three-week highs after China cut benchmark interest rates to support economic growth.

 

Corn futures for March delivery fell 1.3 percent to $3.8025 a bushel, the largest drop since Nov. 19.

The Scrolls: Listener Questions and Comments

 

Question from Richard D - Hey Options Insider Team! Below I have 3 questions:

1.      I am wondering what the key reports are that affect the Agricultural future options (corn, soy, wheat, etc.) and where I can get more info and track these reports?

2.      Also, do options on these ags typically behave the same way equity options behave leading up an earnings report?

3.   Finally, what are the most liquid futures options besides gold, silver, and oil?

 

Question from Anthony Fields: I was just reading through a book (won’t name them here to give them a free plug) that blamed the crash in 2008 on derivatives - particularly S&P futures and SPX options. What’s your take on stuff like that? Drive you crazy or is there some truth?

Futures Options Roundtable 15: Oil, Gold and Corn Skew Palooza

The Grand Marketplace: What happened this month in futures options?

Energy: Crude oil is taking it on the chine. No shortage of conspiracy theories for why crude is dropping. Crude option skew is increasingly steep. Brent/WTI spread and NADEX Binaries rundown.

Metals: Gold and silver skews had been extremely put heavy, but now they are back to a more traditional smile shape.

Ags: What’s happening in ags?

Cocoa up on Ebola fears - Prices of futures could spike even higher if Ebola crosses the border into the Ivory Coast and Ghana - the main exporters of cocoa in the region.

Corn: futures for December delivery climbed 2.2 percent to $3.56 a bushel, the biggest gain since Oct. 14.

Soybean futures for November delivery rose 2.1 percent to close at $9.6425 a bushel, the largest advance for a most-active contract since Oct. 13.

Wheat futures for December delivery rose 1.1 percent to $5.1925 a bushel, reaching $5.2375, the highest since Sept. 10.

 

The Scrolls: Listener questions and comments

Question from Alexander King - Question for the esteemed FOR panel. What is the consensus on crude here? More protracted downside? Fight back to the upside? Worth paying for these crazy puts in WTI?

Question from Vostro - I am an active GLD trader. Should I consider trading gold futures options instead of GLD options?

Futures Options Roundtable 14: Catching a Falling Corn

 

Grand Marketplace: Overall trends for the past few month: CTAs bounce back in August - all managed futures indices calculated by Newedge reported positive performance.

Ags:

Corn: Corn futures continued to slump to a 50-month low as waning prospects for frost damage this week

Wheat/Soybeans: Unusual activity, hot strikes and large open interest changes.

Energy:

Crude Oil:  Taking it on the chin as ISIS "crisis" fails to impact production.   

Nat Gas: Unusual activity, hot strikes and large open interest changes.

Metals:

Gold: Gold futures rebounded from an eight-month low on signs of increased demand for bars and jewelry in India.   

Silver: Silver futures for December delivery rose 0.1 percent to $18.62 an ounce.

Platinum: On the New York Mercantile Exchange, platinum futures for October delivery fell 0.5 percent to $1,363.50 an ounce

Forex:

 

Currencies: The US dollar making a strong move. The price of the UK pound amid Scottish independence fury.

Futures Options Roundtable 13: Hot Oil Action

The Grand Marketplace: An overview of futures options action.

Oil: Crude on a downward trajectory since reaching record highs last month. WTI/Brent spread still remain quite wide.

Metals: Gold just barely broke through the $1300/oz price and silver broke through $20/oz. Long positions jumping up a bit, short positions taking it a little on the chin.

Ags: Corn taking it on the chin due to wet weather in the Midwest. It’s not a good time to be long. US Agricultural Department projecting 14 billion bushels, a staggering harvest.

 

The Scrolls: Questions and comments from our listeners

Question from Dave - I think Brent may have some legs, perhaps reaching the 110 level by the end of the year. What should I be trading from an options perspective to best express this viewpoint?

Question from Savah - Can you explain what an FCM is? And how does that differ from an IB? Or are they the same thing? I am trying to wrap my head around futures, but the alphabet soup does not help.

Question from A Mason, Southington CT - Futures are an obligation, while options are a right, but not an obligation. If this is true, why would anybody ever deal with futures? An obligation is always worse than having an option, correct?

Futures Options Roundtable 12: Metals, Energy and Ags on the Move

The Grand Marketplace: Energy: Oil - record Brent futures trading volume. A NADEX binary activity rundown. Metals: An aggressive selloff in gold on Monday. Silver opened off 2.5% on Monday. CME cuts trading margins on gold and silver futures. Silver fixing: another cry from the tinfoil hat club. Ags: July 7 - corn, wheat futures hit almost 4-year low. Update: Monday 7/14 - corn snaps losing streak. From Futures Magazine: option play: are soybeans really in the biggest slump in over 40 years?

The Scrolls: Listener questions and comments.

Question from Steve Fitzowen - I am looking for a volatility pop in gold - maybe 2 or 3 month ATM iron condors. Which is the better performer from a vol perspective - Comex Gold or GLD? Do you have a preference as to which product you use when trading the shiny metal? Does retail flow in GLD affect the performance of the product? Great show. What about weekly? Lots of swings in the futures between shows.

Question from Verd3 - This question is for the futures options roundtable. I am bearish on WTI at these levels. I am expecting a 5% retracement back to the 95 range in the next three months. Agree? Whats the best strategy to capture that move using options?

Futures Options Roundtable 11: Commodity Sturm und Drang

Grand Marketplace: Crude oil/energy and the impact of Iraqi situation on oil markets. Gold has been on a protracted selloff for the better part of the past month. Implied volatility has also been collapsing in gold - a surprise for many new futures options traders who are used to investment skew. Iraq & gold: the impact of the Iraq events has also been felt in gold. We saw a sharp spike in gold futures and GLD, plus gold volatility also spiked on the news. El Niño may impact oilseed prices this year.

 

The Scrolls: Listener questions and comments

Question from doc bass: hello. I have a question for the futures options roundtable program about the recent spike in gold option volatility. Does the panel view this as a significant event - something that will spark a new volatility paradigm in the product - or simply as an aberrant blip before gold volatility returns to recent lows?

Question from Steven brooks, Lansing, MI: I’ve been enjoying the program. I hope you get around to producing it more often than once a month. I’ve also been slowly building an interest in binary options as a result of the show. I honestly didn’t know much about them prior to discovering this program. I’ve been looking at the spike in WTI in recent weeks and I think this is a bunch of sound and fury signifying nothing. Can the panel recommend a good play in the NADEX binaries to spec on a downside retracement in oil? Or should I stick to the WTI near-term products instead? And one more quick question - can I trade these products through my current broker (TD Ameritrade) or do I have to trade them through NADEX? Thank you for taking the time to answer my questions.

Futures Options Roundtable 10: A Deep Dive Into Futures Options Data

Today’s guest co-host is Nick Howard of QuikStrike

The Grand Marketplace: Industry group believes CME Group should suspend open-outcry trading if Globex crashes after an exchange outage in April. 

Ags: Wheat futures cap 10-month slump, falling 9.4% from a 14-month high on May 6. Soybean prices rise on tight supplies, increasing $.20 to settle at $14.85 a bushel. Corn prices plummeted, ending a 4.7% weekly slide. Coffee prices soar as Brazil cuts harvest estimate.

Metals: Hedge funds cut bullish gold futures bets, while gold rise on Indian demand. 

Energy: Oil prices settle at three-week highs.

 

The Scrolls: Listener questions and comments

Question from Seahound - I know about Trade Alert and Livevol. Those services are great, but they focus on equity options. Are there any services or platforms out there that focus on futures options analytics?

Question from Alan Gergory - Is the standard multiplier for futures options 100 like it is for equity options? Or do they us some other system?

Comment from Charles Dectan, New Orleans, LA - I agree with Jeff from the recent episode. Hellen was great! You guys need to get her on the show more often. She brings a unique perspective to the grains markets.

Futures Options Roundtable 9: The Great Grains Breakdown

Grand Marketplace: Today’s guest is Helen Pound, Sr. Futures Market Specialist at KCG Futures

Grain futures were quite active this week with beans and wheat prices advancing dramatically as corn struggled. There was much conversation today regarding a Reuters wire service article about recent Chinese defaults and cancellations of Brazilian bean cargos.  Gold futures fall on possible Ukraine progress. Copper futures in Shanghai (the world's biggest user) traded near its highest level in two weeks. Nat Gas not lighting up the tape as much as it was a few months ago, but a lot of furor in Oil.

 

The Scrolls: Taking delivery and natural gas

Question from The Seahorse - What is the process if I wanted to take delivery of a commodity future - maybe an agricultural contract like wheat or a metals contract like gold?

Tweet from Anders - Nat gas is the move done or should I scoop the cheap vol ahead of another move?

Futures Options Roundtable 8: The Grand Global Marketplace

The Grand Marketplace: Dan and Mark report on what happened at the FIA Conference in Boca Raton. All derivatives products were up about 2% in 2013. Let’s play “2013 Top of the Heap” for each segment in futures and options.  Big metals stories: copper, gold, aluminum. Energy updates.

The Scrolls: In which the listeners dictate the conversation

 

What broker to use for new traders in futures options?