We are in a short holiday week, with most markets closed on Friday. Tomorrow will be a bit unusual, the Bureau of Labor and Statistics has decided to release the jobs data despite most government offices and most exchanges being closed. As a result, the CME will be open for a brief trading session in the Interest Rate and Foreign Currency markets.
Thursday’s Jobless Claims came in a bit better than expected. The number was 268,000 for the week, 20,000 less than most expected. This was the lowest number since January and the second lowest number in a year. This may have investors looking for improved data in tomorrow’s reports.
Trading numbers and releases is a tough thing to do. You never know which way things can go. The initial reaction may be very different than where the market may be five minutes later. A number may look bullish, but if it is not as bullish as expected, you often see a short term sell off.
Ahead of Friday’s report, I like defining my risk with a long options play.
The Trade
- I like buying the April E-Mini S&P 500 2100-2000 strangle.
- We are buying the 2100 call and the 2000 put at the same time, looking to take advantage of a move in either direction.
- I am trying to get in this trade at 10 points ($500.00) or better.
- These options expire on April 17th so this is a short term trade. I am setting an initial exit at 20 points or better.
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RISK DISCLOSURE: THERE IS A SUBSTANTIAL RISK OF LOSS IN FUTURES AND OPTIONS TRADING. THIS REPORT IS A SOLICITATION FOR ENTERING A DERIVATIVES TRANSACTION AND ALL TRANSACTIONS INCLUDE A SUBSTANTIAL RISK OF LOSS. THE USE OF A STOP-LOSS ORDER MAY NOT NECESSARILY LIMIT YOUR LOSS TO THE INTENDED AMOUNT. WHILE CURRENT EVENTS, MARKET ANNOUNCEMENTS AND SEASONAL FACTORS ARE TYPICALLY BUILT INTO FUTURES PRICES, A MOVEMENT IN THE CASH MARKET WOULD NOT NECESSARILY MOVE IN TANDEM WITH THE RELATED FUTURES AND OPTIONS CONTRACTS.
