January 4 Equities Commentary: Scott Bauer

This is Scott Bauer on the floor of the CME Group. And, yes, another day and another record. All the major averages we're seeing just continue, continue to fly. And today's, you know, big push forward is on the economic news that we saw this morning, the ADP report. Another red hot economic report. 250,000 new private jobs reported. The expectations were for 190,000. Last month, November, was revised down just slightly, but the economy is red hot ahead of tomorrow morning's big jobs number. We'll have to see what happens there. But the market really liked what they saw this morning, really took off. We're seeing the S&P hit new records. DOW hit over 25,000. You know, it's full steam ahead here. Now, all of that is really in the face of some uncertainty of some geopolitical concerns certainly going on with Iran and North Korea. But right now, those seem to totally be on the back burner. Talking about options here, the ES, the E-mini options. Really, really busy day once again yesterday. In fact, over almost two and a half million futures and options contracts traded yesterday. 650,000 E-Mini option contracts traded. The most widely traded options yesterday. Three strikes we're looking at specifically. The September 2260 put, the March 2750 call, and then the January, so this January end of week 2, the 2275 put traded a whopping 34,000 contracts yesterday. All said in total, almost 650,000 contracts with now a very, very heavy bias to the call site. Just a couple days ago we saw about 80% of the options being traded were put options. Yesterday only 65%. So 35% call options yesterday. That is a very, very heavy day on the call side. With the volatility as depressed as it is right now across the spectrum, the move for end of day tomorrow in the S&P complex is only about $8, and going out to next Friday the option market is expecting a move of about $20 in the S&P. Now, let's move on to bitcoin. We've seen quite a consolidation recently between intraday highs and lows which actually is a good thing. I've said this before. This is not just consolidation due to, you know, lack of interest. It's due to the fact that this is now becoming a very widely accepted product. We're seeing volumes slightly pick up day to day which is really good. Overnight in this past trading session we saw bitcoin futures here at the CME trade between 14,200 up to 15,400. But what's really interesting now is the diversions in these calendar spreads. So January to Feb and Feb to March, they're almost right on top of one another. We're seeing very, very minimal, minimal spreads month to month here. We'll see if that continues. This is Scott Bauer on the floor of the CME Group.