Striking Options: December Forecast, Metals, and Equities

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  • 04 mins 27 secs
Fed speak in the spotlight this week.

In this video Jeff Kilburg, CEO of KKM Financial and Bob Iaccino, Chief Market Strategist for Path Trading Partners discuss hawkish vs. dovish Fed and if the central bank is close to reaching its “neutral rate” status.

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CME Group


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Welcome to striking option. The show, The reveals, the options. You have to better navigate markets. I'm Jeff killed and I'm joined today by five by Chino. Welcome, Bob. Good to be here, Jeffrey. Well, it's hard to believe we're wrapping up November already after a pretty rocky October and nasty November. What does December look like, Bob? Well, the beginning of December looks pretty volatile in and of itself with the G twenty meeting the OPEC meeting. We've got coming up, but it will probably calm. Hopefully, we get that Santa Claus rally everybody likes. Everyone does love. That's a closet. Really? No doubt about that. Are you ready? Getting his first lady around, Bob? I am ready. Fedspeak. What? We certainly have a big docket of feds speaking A lot of forward guys coming out this week. What are you looking at? Specifically when the fight is speaking this week? Well, I want to see the lead up to Jerome Powell speech. We already had Vice Chair Richard Clarita say that the Fed is actually close to neutral and should be data dependent. Three more speakers today. I want to see that in the context of Jerome Powell speech, You see, a little reaction in the U. S. Dollar will strengthen the U. S dollars. So whatever tree example would you utilize as we go into this Fedspeak week? I think the place to look at this is gold. You generally don't have gold in the dollar moving the same way we've had that lately. That's flight to safety. We might get that out of the market now, so I'm hoping to sell a DC call spread as an example of what you could do to take advantage of the higher volatility we've seen. I'm looking at the twelve forty twelve sixty week. One call spread expired December seven, with the underlying at about twelve twenty seven. I can sell the twelve forties for about three hundred twenty dollars by the twelve sixties for about ninety dollars, taken about two hundred thirty dollars. Credit know this makes allot of sense, as we will see continued volatility not only in the dollar but obviously in gold itself. So as Fed comes out this week, I like this chair. Example. Bob. Great stuff. Thank you. That, in that inverse relationship, takes over all else equal between the dollar and gold absolutely. And remember, these are trade examples, not trade recommendations. Let's move into the second Lightning around Apple places. Second. Well, we have seen Microsoft Vault. Apple is the largest company in the world. Why's that? It's due to the beating that Apple has taken. We saw recently another potential ten percent terrorist be included, and that really sent some sellers out there on Apple yesterday. But what do your thoughts on Natalie Apple? But the whole fang stocks itself? Well, I think, in the battle for the most meaningless title ever. Microphone back briefly. But essentially, there's trouble with the tariffs. And the especially Elektronik, which doesn't hit Microsoft as well, shouldn't hit all of the Fang stocks. But as you know, Jeff, they tend to trade together. So how do we embrace is voted? The way I'm looking at Bob is that after a priest substantial update yesterday on Monday, we saw two percent moved up in the Nasdaq. A little recovery. A little bounce, if you will. I want to look to continue to see his volatility in Nasdaq, some selling a call spread about two percent of the money from selling the Dese Week one Nasdaq e many sixty eight fifty call collecting about fifty ticks for that, and that's going to also allow me just another two percent higher. I want to buy that seventy fifty call that's going to cost me about ten. Takes net net. I'm looking to collect about seven hundred and twenty dollars on this call spread. What do you think about this? Typically, China Approaches has arranged bound Nasdaq E many with Mohr downside really like what you're doing and especially when you're doing it. Given all the buying ery events that have to get out of the way for the bull marked actually break through the slow holiday markets that we usually have. So it's a good trade and is very good timing for that trade. Remember this chain example. It expires this summer. Seven Same expirations years Bob, about ten days away in the December Nasdaq Futures Airline contract. This train examples priced out when we had the future's at about sixty six seventy six fifty. And that at the money volatility, would like to talk a lot about here on striking options was around twenty seven. So it'll be interesting to see as this is a short term trade in the Nasdaq E many one hundred. Then again, the timing of the job's really good. It's not impossible for equities to rally through what's been going on, but given the timing of it, it's going to be difficult. Your trade should work out. Hi, Bible thinks is always well. So I thank you for two new striking options. Please tune in every week is we will continue to strike options.