Welcome to this episode of The Futures Rundown brought to you by T4 Futures and Options.
With your host Mark Longo and guest Scott Bauer, Prosper Trading Academy.
The Trading Pit
- What’s catching our eyes in the futures markets this week
The Contract Specs Segment
- Let’s get precious and talk about gold (contracts/trading examples)
Futures Free For AllÂ
Answering your futures questions:
- Any disadvantages to buying futures contracts that expire several months from now that have decent volume instead of the active contract
- Discussing the growing world of sporting futures
Futures 101
- Futures Margin Overview
TRANSCRIPT
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The futures markets can be downright scary.
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And now it’s time to break into the futures markets.
It’s time for the Futures Rundown.
Alright everybody, happy to hear that music again because it means I’m back in the Chi Town studio, back from my Sojourn to the STA National Conference last week.
A lot of great chats were had there in the Southern Studio last week.
Some of them already hitting the pro feed, the rest will be hitting over the course of this week.
I’m going to get them early of course, as well as Options oddities, as well as Pro Q&A’s an awesome one going deep into Futures with Kevin Green yesterday from the Schwab Network.
Only one place to go to get access to all that fun, theoptionsinsider.com/pro.
A lot of Futures being mixed into our Pro these days, which is always fascinating out here.
If I sound a little bit under the weather, it’s because I am listening, I think I came back with a little bit of something from my Sojourn to the Southern Studio.
But nonetheless, we are going to power on because neither rain nor sleet nor raging fever will keep us from our appointed Futures rounds.
And joining us on the old Futures Rundown for the first time, he’s been on Twi-Fone, some of our other programs for the first time on the Futures Rundown.
Mr.
Scott Bauer, the Chief Executive Officer over there at Prosper Trading Academy.
Scott, welcome to the Futures Rundown.
Thank you so much, and I am so glad that we’re not sitting in the studio together, and I hope you feel better.
Let me come over there and just shake your hand and cough on you a little bit.
It’ll be good.
Yeah, there you go.
Hopefully, you feel you’re going to start feeling better.
Yeah, you know, I’ve had worse.
I will power through here, listeners.
But Scott, I’ve had mentioned you’ve been on Twi-Fone before in some other shows.
This is your first appearance on the Futures Rundown.
Clearly, from the feedback we’re getting, this is a new audience coming into the network, which we always love to see.
So let’s start there really quickly, give our listeners a bit of an overview of your background in the Futures Market, as well as what you folks do at Prosper.
Sure.
I’ve been in the markets trading professionally since 1990.
Traded on the floor, both at the SIBO and the CME.
Ran Goldman Sachs S&P 500 operation for them for quite a while.
Built up my own trading business, and then left to teach people how to trade back in about 2013, 2014 or so.
And Prosper Trading Academy has been around for quite a while, and we teach people how to trade live in the markets.
Well, speaking of those live markets, let’s get to them now, listeners, as we dive right on into the trading pit.
It’s time to break down all the action that’s lighting up the Futures Markets this week.
What’s limit up and what’s crashing and burning?
Let’s find out.
It’s time to enter the trading pit.
All right, everybody, welcome to the trading pit.
The portion of the show we break down all the action we’re seeing out there right now in the Futures Markets.
Of course, our first live show back, we did live to tape last week with our good buddy Dan Grahams, of course, last week, a hot week with the Fed lighting up the markets, surprising some folks, maybe not others, with their 50 basis point rate cut out there.
The markets at first not liking it, then loving it.
We’ve been kind of off to the race, at least on the equity front, ever since.
Scott, I’m going to do my best to spare my voice today.
So feel free to explore at length what’s lighting up your tape in the Futures Market this week.
Let’s start.
Let’s go back to last week.
What were your thoughts on the 50 basis point cut?
Were you surprised?
Were you believing what the Fed watch was telling us that it was kind of a done deal?
Where did you fall on that?
Mark, you know I’m always as transparent as they get, and I absolutely did not have that on my bingo card.
I was not short the market because I truly thought there was going to be a 25 basis point cut, which would have led to a rally.
I was saying going into that that if there was a 50 basis point cut, just like many people were, that that would show a bit of a sign of panic from the Fed, and that wouldn’t be a good thing.
But listen, there’s one thing that you and I both know after doing this for a really, really long time is what we think doesn’t matter.
So the market reacted well.
I still think there’s some concern about that because even though the data is pretty strong and pretty benign, which is a good thing for the Fed right now, to me, Main Street is not doing as well as these numbers kind of lead us to believe.
So I’m a little, let’s call it optimistic, a little cautiously optimistic.
Yeah, it was fascinating to watch the futures and I did have a few minutes.
I was actually chatting with our good buddy JJ Kinnahan right there.
He was actually running a few minutes late to the Southern studio.
Right as the Fed was cutting the rates, I was able to watch the markets a little bit, which was fantastic to see just kind of the whipsaw we had early on reminded me of some of the earnings announcements we used to see back in my single name equity option market maker days.
Well, all of a sudden we have an announcement and let’s say Intel and the underlying would swing all over the place.
We saw a lot of that in the futures immediately after the announcement as well.
Kind of coming to pass what you were saying there earlier, Scott, the 50 basis point first we rallied, then it seemed like the people got spooked by that as we were debating the week before. 50 basis points.
What else is lurking out there in the data that we’re not seeing?
So they kind of came for it.
And of course, after that session, after that whipsaw session, it’s been mostly off to the races last few sessions out here have been kind of treading water.
We are lacking that next big catalyst like a Fed move or an earning season pickily in the in the equities complex.
But outside of the Fed, Scott, what’s been lighting up your tape and the tapes of your clients over there at Prosper this week?
You know, on the options side, there’s a lot going on, especially if you look in futures and futures options, interest rate products and the commodity space and not just gold, but unbelievable that I’m saying this, how about natty gas that has been off to the races.
It’s been really super busy.
The volumes have been really good.
You know, over the last couple of days, things have contracted a little bit overall in the markets, which I think that’s really a good thing.
Because when you see a violent move, and I’m going to call what we got last week, pretty violent move.
You want to see some calm come back to the markets.
So you know, it can kind of sustain itself.
So I think what we’re seeing this week actually is setting up pretty good for the bulls.
Let’s get out there and see what we are seeing this week.
Listen, instead of doing our usual top 10 most active, we’re going to expand it to a top 12.
And I think you’ll see why in a couple of seconds.
This is what’s active, what’s lighting it up right now as we’re firing off the show today.
Listeners here, middle of the week on futures rundown day.
Number 12, we’ve been seeing a lot more action in the FX complex these days.
And that is reflected by our number 12/10, which is the EuroUSD.
Again, we have a interesting string here.
Pretty much every contract we’re going to talk about today, that’s lighting it up all longer term, all the way out to December, which in this short dated zero day world, we’re all living and going all the way out to December is actually an eternity.
But that’s where we’re hanging out for number 12/10 listeners EuroUSD, these contract 186,000 contracts on the tape coming into the start of the show today, right behind it.
Number 11.
Again, you’ll see why we have these extra two in a second. 30 year T-mon, so going from FX off to the rates.
Again the DS contract, 224,000 contracts on the tape there.
Number 10 off to the equities.
You know, equities couldn’t be too far behind there coming in number 10 with the NASDAQ 100 mini 252,000 contracts.
Again surprisingly in the DS contract.
So there’s a lot of interest in the near dated stuff, but not enough to push those near dated contracts into our top 10 this week.
Number nine, back to the rates, ultra 10 year, 260,000 contracts.
Again the DS contract.
Our loan holdout, our loan contract that is not expiring at the end of the year came in at the number eight spot, which is crude oil or pal WTI having quite the week out there, quite the drubbin has been going on of laid out there.
It’s actually the Nova contract in WTI that’s lighting it up today to the tune of 322,000 contracts.
That’s the only one.
Everything else is all December all the time.
All right, number seven slash five.
You’re going to see why we did this listeners because number seven is the S&P 500 micro, the DS contract 384,000 contracts.
We include that in our rundown, but as you’ll know micro really a much smaller, more bite size contract.
So you really have to divide that volume by a substantial amount to really see the true notional value out there.
So it’s in our top 10.
We thought we’d keep it to give you a sense of the flavor, but it’s not really there at number five.
Number six, we have slash four.
We have the two year note 394,000 contracts.
Again, the DS contract there.
Number five, keeping it in the rates, a lot of rates, no surprise coming off Fed week, a three month sofa DS contract as well, 442,000 contracts on the tape there.
Number four, keeping it in equity land.
This time to the bigger contract most of you are familiar with.
It’s the S&P E-Mini, again the DS contract, which is a little bit surprising. 533,000 contracts.
Number three is actually our NASDAQ 100 micro, 723,000 contracts.
Again micro, so we’re going to kind of bump that off the list.
Number two, five year T-note 754,000 contracts in the DS expiration.
And number one, the big dog yet again this week, keeping it in the rates complex post Fed.
It’s the 10 year note.
Over 1 million contracts on the tape already, 1.06 million to be precise.
Scott, anything catching your eye or perhaps surprising you out there in today’s most actives?
Well, like I said, you know, natty gas, which we didn’t mention there has been unbelievable.
I would have thought in the crude complex, just given the volatility, if you look, if you happen to look at C-Vol, you know, the volatility measurement at CME, you’ll see that that vol in the crude contract and WTI is really, really expensive.
I would have thought we would have seen some more volume across the board there.
The one that really sticks out to me as a constant over the entire month, and I would expect it to continue, is the three month SOFR.
All time record average daily volumes for the month here.
Just last week on the 17th, we saw open interest record.
So there is a lot of activity there, and I don’t think that’s going away anytime soon.
Are you folks slinging a lot of Nat gas over there at Prospera these days?
Is that a hot contract for you and your mentees over there?
Not really, not really, but we do have a lot of people that look at UNG, but I, you know, it lights up, it’s been lighting up my screen just because we’ve seen such a big move here, given some conditions that’s happening in Brazil, maybe a little bit of a supply issue, but they don’t call it the widow maker for nothing.
So I’d be really careful.
Yeah, Nat gas threatening a three handle again, about 282 as we’re kicking off the show.
Up about a dime since Monday, of course, you go back to the end of our show last week, more of a move out there.
We’ll probably get more into Nat gas tomorrow on this week in futures options.
Oh, listeners, let’s look at some other interesting names that are lighting up this week, maybe some surprises that are coming across our desk again, just for this trading week.
Let’s see what’s lighting it up.
Let’s do a quick top five and bottom five.
Number five to the light side, moving nearly a full standard deviation.
So lighting it up to the upside is ethanol.
Again, the October contract, not a contract we talk about a lot here, doesn’t do a ton of volume, but nonetheless, move in a wee bit behind it.
We’re going back to FX again to one of the lesser FX pairs, the South African Rand again, the Dec contract up almost a full standard deviation this week as well.
Number three, we got the US dollar index, a lot of FX on our tape this week, up over one about one and a quarter standard deviations.
Number two, we got uranium, near dated uranium September up 1.4.
We don’t see a lot of uranium action as well.
But these days, Microsoft’s talking about spinning up Three Mile Island again.
So all of a sudden uranium is hot again, up nearly one and a half standard deviations this week.
And again, leading or dominating, I should say, our surprise leaders, gainers for the week out here is sugar.
Once again, the Jan contract this time up nearly two standard deviations in the weeks of sugar, where some action is this week.
Let’s go to the dark side now and see what’s going on out there.
The listeners, number five to the dark side, we’ve got US Steel, US Midwest Steel actually, the Dec contract.
Talk about steel too often, but there we go, off 1.4 points.
Obvious reasons why that’s taken a bit of a drubbing of late, caught up in this political cycle of late.
Number four this week is the Aussie dollar.
So Aussie dollar USD off almost one and a half standard deviation, but 1.4 there as well.
Peso USD, Dec contract off about 1.6 standard.
Man, we were looking at all FX the rest of the way listeners.
Number two, I should say, New Zealand dollar off 1.6 standard deviations and the big dog to the dark side this week, the Swiss Frank.
Remember when we had that black swan and the Swiss Frank not too long ago listeners?
Well, now it’s given it up over one standard, about 1.6, almost 1.65 standard deviations to the dark side.
Mr.
Scott, anything catching your eye in that somewhat esoteric list?
Sugar, Uranium, a bunch of FX, anything catching your eye, sir?
For sure sugar.
There’s no question about it.
I mean, we’re almost at the point there is kind of what we saw in the coffee where in the marketplace, almost a panic, literally almost a panic.
I don’t remember the last time, if ever, I’ve said that about sugar.
So that one definitely catches my eye.
Some of the other metals you mentioned, Uranium, but with the news coming out of China and what their central bank did and growth possibilities there, we’ve seen some spikes.
Right in many of those metals, again, kind of like I was talking about, Natty Gas though, to me, we’ve kind of seen this story kind of plaster to the wall before and I’m not buying into it.
You’re not buying the Uranium spikes, sir?
No, I am not.
And I know there was talk about restarting, whatever it was, I’m not buying into it.
Not believing the hype in the land of Uranium.
We’ve been doing the show.
It’s hard to believe listeners already almost a full month.
This is indeed now coming up on episode four.
So crazy how time flies when you’re launching new shows, 17 and a half years in and not just going strong, but growing here on the network.
Let’s look back on this month really quickly.
Now this is to a top five.
See what’s really been lighting it up over here since we kicked off this show.
Whooping now four episodes ago.
And let’s just do a top five.
Let’s do Nat Gas, the one Scott was just talking about.
It’s up a little over 10 percent over the past month.
Number four, from the energy we go to Palladium, that’s up about 10.3 percent.
So going to the precious land.
Number three, going to the AGs, it’s wheat, the Dec contract again, up about 10 and a half percent.
And number two, keeping it in the AGs, it’s oats, 19.3.
Man, oats have really been moving away.
And the big dog, again, going back to what we were just saying, over the past month, it has been sugar up almost 25 percent over the past month.
So Scott, I guess we picked an auspicious time to launch a future show.
What do you think?
It’s always a good time, right?
There’s always going to be something going on in the market, even if it’s something maybe a little bit more obscure.
But listen, over the next six weeks or so heading up to the election, we know that there’s going to be volatility.
We know that whether it’s in currencies and interest rates on the FX side or whether it’s on the commodity side, there is going to be activity.
So I’m sure you’re going to have lots to talk about.
If you had to say right now talking to your clients over there, are they still straight?
Mostly E-minis at the big dog over there at Prosper?
What’s the hot product everybody wants to sling right now?
E-minis are definitely number one.
Micros are a close second.
Micros both in S&Ps and in the NASDAQ.
But E-minis, that’s really still the go-to and the liquidity is there.
So no reason not to.
Not everything is gaining over the past month.
Some stuff had the temerity to give up some value.
Let’s do a little quick bottom five here as well over the past month since we kicked off this show.
Number five is our Bob.
What the heck is our Bob anyway?
Says our guy in the intro.
Maybe we’ll explore that riddle on a future episode, listeners.
But it’s the November rBob contract off nearly 6% over the past month, about 5.85%.
Number four, going out to the world of crypto, it’s the Ether micro and the Ether big futures.
So four and three pretty much both off a little over 6%.
Number two, getting back to the esoteric dairy, it’s cash settled butter, the October contract.
Lighting it up off 8.63% to the dark side.
And the number one loser since we kicked off this show is the October ethanol contract, listeners, off 11.14%.
Scott, any surprises in that chart, sir?
No, not not at all.
I mean, especially when you look to see what what crude has done in that whole space, you know, it’s I don’t want to say it’s demand destruction right now, but certainly in my opinion, in the entire complex there, if it weren’t for some of the geopolitical unrest right now, we we most certainly see prices lower than they are right now.
We saw some crypto in there.
I have a feeling we’ll come back to that in a little bit.
But first, it is time to keep on rolling with the show, listeners.
It is time to explore the contract specs.
Have you ever looked at a futures product and said, what the heck is that?
Let’s find out together.
It’s time to get the contract specs.
All right, listeners, there’s a lot of weird stuff that trades in the world of futures.
Luckily, you have us here to hold your hand and walk you through it.
Today, we’re keeping it to a very mainstream product.
Scott, are you a big fan of all things precious in particular gold, sir?
And what have you been up to out there of late?
If so, we follow gold and silver very, very closely.
In fact, we’ve had numerous positions, especially in silver.
But what I look at in gold, it’s really a tough market to buy into, to take a long position on the way up.
However, the charts, fundamentals, the technicals, everything has completely set up, as we all know just from seeing what’s happened, is buying on any dip, any dip you’ve gotten whatsoever.
And it certainly looks like the landscape out there is for gold to move higher.
A lot of people are saying, oh, it’s overbought, it’s overbought.
But boy, when you really look down beneath the surface and look what central banks around the world have done with accumulating gold, and then obviously just the risk factor out there, hard to see it going down.
And so we have been trying to be opportunistic on any kind of pullback to take a new position.
And GLD, SLB, those are going to be your preferred vectors, sir?
Absolutely.
Straight up, most liquid contracts that are out there, I don’t see any reason to get fancy with those.
Kind of hard to argue against those because they do indeed hold the physical.
Something we’ll get back to in a little bit with some other approvals on the ETF options front in a little bit.
But let’s walk through an example.
We’re talking about the big dog over there at CME first.
Yes, the big gold futures contract.
Big one because I say it’s for 100 Troy ounces.
Now you might be saying, what the hell is a Troy ounce?
Well, in the world of precious metals, they do things a little bit different, little bit different rules of engagement.
They base their measurements on a 12 ounce pound as opposed to the traditional 16 ounce pound.
Hence the birth of the Troy ounce.
If you need to know, it’s 31.103 grams.
There you go.
For those of you out there who who like to be precise.
Trading hours.
When can you trade this thing?
It’s pretty much the standard.
We’ve seen a lot of other big products.
It’s pretty much going to be your Sunday to Friday, 5 p.m. to 4 p.m. central.
You get an hour off after 4 p.m. for the rejiggering over there at CME.
Then you’re right back at it again.
So not quite 24/7, but a pretty expansive trading range.
One of the things to keep an eye on when you’re trading the big contract is this is a physically settled contract.
So this is what we’re talking about in the intro and some of the other products with the proverbial truckload of gold on your front lawn or probably more accurately in a warehouse.
But still something to bear in mind if you’re going to sling the big contract, which is it is a physically settled contract.
Just something to bear in mind.
Let’s walk through an example.
In fact, we had to change this very recently Scott, because we prepared this for an episode a few weeks ago and the gold has been on such the rampage that we had to rejigger all of our numbers.
It keeps exploding to the upside.
How dare they, Scott, make our calculations more complex.
Seriously, you look at this and like I said, I mean, it has just been not a straight line, but pretty much a straight line upward.
And the Dies contract is the active one right now.
And I’m just looking at volume today here, 175, 176,000 contracts.
So it is active.
There’s a lot of interest in there.
And I don’t see where this ends anytime soon.
Yeah, it has been quite the run from about 2500 when we kicked off the show nearly a month ago to about 26 half as we were coming into the start of the show.
So quite the protracted rally out there in gold.
And as you said, doesn’t show any signs of slowing down.
So we had to recalculate all of our numbers, listen, because of course now, remember, when you’re calculating that notional value, you are multiplying that 100 troy ounces times the actual closing price of the underlying, which in this case coming in to start the show was 2650.
So quick math, you’re talking about two hundred sixty five thousand five hundred dollars in terms of notional value.
So that’s a big boy.
It’s a big, meaty contract out there.
Now we try to get representative numbers from a variety of different venues.
Remember, we talked about this before.
The brokers use this initial margin as kind of a bit of advertising.
So they they fudge it a little bit, but we try to get nice averages for you folks to give you a sense.
So if you’re coming in right now, you want to do a one lot on the big gold futures contracts and it costs you an intraday initial margin of a little bit shy of six thousand dollars, five thousand seven hundred and seventy five.
And again, we talked about that.
That’s your intraday.
So you have that on and then as long as you close it out before the close, you’re good to go.
You don’t need to worry about any other margin levels out there.
So let’s walk you through an example, listeners.
And that’s got if you have some thoughts, I’ll be happy to entertain them.
But you go out, you buy one gold futures contract, the big boy.
So you put in your fifty seven seventy five.
That’s your initial margin deposit.
We’ve explained that on the show in the past.
Listeners, now let’s say gold’s mostly a quiet day, drops about a point at the end of the day.
Remember, we talked about the tick size in this name.
The ticks are ten dollars per troy ounce or pretty much one tenth of a point.
So one full point, ten ticks at the end of the day.
So it’s pretty simple math at the end of the day.
Ten ticks and then times ten dollars is one hundred bucks.
So pretty straightforward.
Ten times ten, one hundred bucks is what you lost.
You could also go the straight one point times one hundred troy ounces, also one hundred bucks.
However you get there at the end of the day, you are going to be debited one hundred bucks.
You now have fifty six seventy five in your trading account at the end of the day.
If you just do an intraday, that’s all you need to worry about.
You’ll be debited that one hundred bucks and you could live to fight another day.
If you want to hold your position overnight, obviously you have to kick in a little bit more money.
In this case, the overnight margin for the big gold contract, eleven thousand five hundred and fifty.
So you have to kick in pretty much double what you had in your account, about fifty eight seventy five to get you up over that margin for the overnight level out there.
Scott, anything you want to add on our example of losing one point on a big gold futures?
No, that pretty much sums it up.
You know, I was following exactly what you were doing here and you know, CME in this one because the tick size is ten, you know, makes it pretty easy to follow the math in this one.
But some of the other contracts out there aren’t quite as easy.
This one, you know, the math works for most people.
Now if you’re saying to yourself, self, I’m a little bit spooked by that physical settlement and also that’s still too much capital.
It’s a little bit too rich for my blood.
Well, you’ll be happy to know the CME agreed with you.
As Scott was mentioning earlier, they have been moving towards much more bite size contracts out there these days.
So allow me to present for those of you maybe a little bit skittish for the big boy, the micro gold futures contract.
Pretty much take everything we just said and just divide it by ten.
Say one tenth size contract from the big boy out there.
So obviously ten short ounces, your notional value twenty six thousand five hundred, trading hours going to be the same initial margin again divide by ten.
So five seventy seven fifty is what it’s going to cost you and your ticks going to be one dollar as opposed to ten dollars out there for the big boy.
So same deal.
If you lose a point and you said you have the micro future in your account, are you going to be debited ten bucks and then you’re out and you could live to fight another day.
If you decide you really want to hold on to it, you think you’re here for a little bit longer term in gold, you can deposit again pretty much double what you have in your account right now to get to that overnight margin level for the micro, which is eleven fifty five listeners.
And then you too can continue playing day after day in the micro future.
Scott, you said a lot of your mentees and clients prefer the micro.
Does the prospect of cash settlement, does that make them a little bit less skittish to dive into the fire?
No question the cash settlement more so than anything it does because especially if you know if you’re not adept in trading futures and you see that physical settlement that scares away a lot of people.
So the cash settlement is a big, big enticement.
And you know what in this micro gold contract, it’s pretty liquid.
I mean there’s ninety thousand contracts today or so, almost a hundred thousand today.
It is pretty liquid and I do see people preferring to trade that especially if they’re just kind of newer to the landscape.
And a lot of you are new to the futures landscape, so you have a lot of questions, which is why we have our futures free for all segment.
Ring the bell.
It’s time to take on all comers in an epic Q&A battle royale.
All questions can enter but none can leave without an answer.
It’s time for the futures free for all.
Welcome to the futures free for all.
Listen, let’s dive into some of your questions right now.
Love to see so many of you engaging with the show just a few episodes in.
It’s a good reminder you should be subscribed to the full network at the end of the day.
You never know it’s going to hit you out there including a brand new show just a few weeks ago.
He brings off with a great question from Pat.
He says, “Thanks for the awesome podcast.”
Thank you for being an awesome listener.
We love you all out there.
He says, “I’m a newbie to futures.
You are far from alone, Pat.
Are there any disadvantages to buying futures contracts that expire several months from now that have decent volume instead of the active contract?”
So Scott, I kind of just walked through a very near dated intraday example with the gold futures because that’s the way a lot of people are going to engage with these products.
But Pat wants to know what if he goes beyond that a little bit?
What if he goes down the term structure a little bit and buys one of those futures?
Are he wants to know are there any disadvantages to buying those instead of the more active front contract?
Well, first and foremost, any time you’re buying or selling in any contract across the board, if the liquidity is not there or if the volume is not there, price discovery is everything.
So you’re more likely going to have to buy an offer or sell a bid rather than maybe seeing something mid market-ish.
So if you’re in a position on a contract where the liquidity is not there, you may have a little issue trying to maneuver out that as opposed to what the front month active contract would be.
So that’s what I would think about most.
And then think about also why are you– obviously, you’re buying time because you think the price of whatever asset class it is is going to go in that direction over time, but your capital is tied up for a longer amount of time.
And then you have the liquidity issue.
So that’s why you see other futures contracts other than the active or the front month contract.
That’s why you see very low volume out there.
Yeah, I had the same thought.
Pat, I would love to know– give us a little bit of a follow up– why you want to go a little bit farther out.
Because obviously, it depends on your use case.
I’m going to assume from your question, you’re probably not an end user or a producer looking to hedge.
Those are the people who usually go a little bit farther out of the term structure.
For a lot of retail, the intraday is where they like to play for a variety of reasons we just laid down.
So I’d be curious to know why you want to go that way.
And also, Pat, because your question was so awesome and it came in earlier, our producers actually kicked it up to our pro Q&A yesterday.
Mr.
Kevin Green is also a big into future.
So we went deep on your question there as well.
So because your question was so good, our producers will be in contact, give you access to the pro.
So you can hear that for yourself, our detailed conversation about some of the pros and cons of trading longer term futures.
But I would like to hear your reasoning why you would do that.
We also explored on the pro Q&A maybe some options strategies you can use in lieu of buying and holding the futures for a protracted period of time, which as we just said, you’re debited and credited every day.
There’s nowhere to hide in the futures market.
So that could be a lot for some people to take.
So I would be very curious to know why you want to go out there.
We talked a little bit yesterday too about some products that have some good seasonality that could attract you, like maybe a Nat gas or the crops, the ags have some, let’s say, funkiness in the term structure.
So that could certainly attract you.
But outside of that, I’d be very curious to know your reasoning.
We got time for a couple more, even though my voice is dying here listeners.
Let’s go out to Alan, one of our pro memories, it says congrats on the launch of your new future show.
Well, thank you, Al.
It’s just so cool to see the network continuing to grow.
I think it would be interesting to discuss the growing world of sporting futures on the show.
Oh, they are very much a gateway for many new people coming from the world of sports to futures.
Yeah, and that might be an intriguing thing to explore.
Maybe down the road, we’ll get somebody from, you know, your draft Kings, one of those other platforms out there who have a lot of these effectively futures, quote unquote, exchanges.
They’re the ones listing these futures at the end of the day.
So you can’t go out there right now and let’s say we’re in Chicago, you want to buy the bears, you know, their chance to win the Super Bowl.
Those are obviously futures contracts.
So there is some limited futures liquidity.
It’s not really going up on an exchange.
You and I are know and love with a lot of the protections we know and love out there, Alan.
So still the way to go.
Also, you know, SEC approval and CFTC approval in the case of futures are still kind of lingering out there.
I do agree with you, though, that if they do manage to cross this hurdle, it would open the doors to futures and indeed derivatives to a lot of people who maybe right now just are put off by the notion of our Bob or wheat or Aussie USD.
But they can certainly track Bill’s Chiefs.
What do you think of that, Scott, opening the floodgates to the various sports futures here on the show?
Man, my my antennas went up when you when you mentioned, you know, that question from Alan and all of a sudden I scrambled and I went to the CME website.
I’m like, oh, my God, do they we have sporting futures that I didn’t know about all of a sudden.
And unfortunately, we don’t.
I can’t imagine the CFTC is, you know, I’m not going to say ever, but that the CFTC would ever really want to regulate something like that.
I love the concept.
I love the idea.
I’d be a huge advocate for it.
Can’t imagine it’s ever going to happen.
All right, that is going to do it for us on episode four of The Futures rundown.
You know, before we go, Scott, we have a question the week that is kind of near and dear to our hearts here on the show.
It does dovetail with futures.
It also dovetails with the markets of crypto we were talking about earlier on the show with Ether taking it on the chin this week, which is, you know, go figure.
I go down to S.T.A.
National last week.
I ask a bunch of people about if we’re ever going to see Bitcoin options on the ETFs get approved.
No sooner did I turn off the mics my final chat than the SEC comes in on Friday night pretty much and puts out the approval.
So they were just waiting for me to be done.
Listeners, but intriguing stuff.
So I thought we’d ask you, you know, asking you shall receive after months of waiting the SEC finally approved options trading on the Bitcoin ETF from BlackRock.
If you’re not familiar listeners, it is ticker symbol I bit I bit very simple.
Do you plan to trade I bit options when they are listed?
Heck yes.
Hell no.
Or I prefer Bitto, etc.
This is an interesting question for a couple of reasons.
Obviously, we’ve been waiting for a long time for the options, Scott.
And then B, now you have a very clear choice.
You were talking about how you prefer GLD and SLV earlier because they hold the physical.
Now you have a similar choice in the world of crypto where you can go the Bitto bit X route where they have the futures or indeed the I bit route where they hold the physical.
So I’m curious, Scott, what are your thoughts on this approval?
Does it excite you?
Where do you think our audience is falling?
Yes, it excites me.
I’m in the heck yeah camp and I’m going to bet that the audience is in the heck yeah camp as well.
It’s like we’re preaching to the choir or something here.
Exactly.
I haven’t seen an exact date that the rolling out options yet.
I know it’s going to be sooner rather than later here.
But yeah, I think that we’re going to see just massive amounts of volume right off the bat.
I hope so.
I’ve been hearing people not that long ago and even this past week and of course back at the OIC conference as well about this exact topic, people who are spending their days and they’re not talking to me, spending their days day in, day out with the regulators.
And what they were giving me on the feedback side was kind of dire, Scott.
They were saying it wasn’t a question of when but even maybe if these would ever be approved.
It’s like the SEC was very reticent to approve these.
So we finally got it.
They snuck it out there on a Friday evening kind of weird.
We don’t see that too often.
But our audience agrees, Scott, 73.3 percent saying, heck yes, I would expect nothing else.
26.7 percent saying no.
Get over there at options and make your voice heard.
And Scott, where should they go, sir, if they want to check out what you and the team over there at Prosper have cooking?
ProsperTrading.com.
You’ll find us there.
We’ve got our ProsperTrading YouTube channel.
But find out all about us there and we’d love to talk to you.
There you go.
ProsperTrading.com, the place to go to kick the tires and light the fires.
And also check out our friends over there at plus 500 listeners.
And you too can be a part of the action out there in the future’s world as we’ve seen is lighting it up each week.
That’s going to do it for the future’s rundown.
But you know what?
Listen, as the producers hate me, they don’t care that I came back under the weather from Florida.
And I’m going to be in a little bit to chat with the folks over there at Rocktoberfest.
That is, of course, a great charity to help children in the third world out there really who have lost limbs from landmines and other things really have a second chance at life through new prosthetics.
It’s a great charity.
We check in with them every year and do what we can to support them.
And that’s coming up again.
So stay tuned for that.
That’ll be hitting the network shortly.
Back again tomorrow, of course, for our double dose of the option block, as well as this week in future’s options.
Friday, of course, Volvue’s and we’re back one final time for our pro folks over there at options oddities.
And we’re back again next week, another episode of the futures rundown.
Stay safe out there, everybody.
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