July 26, 2016
We continue to buy Eurodollar Puts
I may be dead, dead wrong, I do think this is one of the biggest trades ever…I honestly have never seen options with SO MUCH TIME…out to June, 2017…combined with so much leverage…
I cannot think of an industry in this country that is not on the up and up…even including the Oil business. Whether it’s construction, or technology , or retail sales, or real estate, or vehicle sales, or the malls, or the airports…or WHATEVER…THE ECONOMY IS ON THE MOVE…which is exactly why we HAVE HAD low rates…to stimulate growth…And now that growth IS cranking up, INTEREST RATES WILL GO UP AS THERE IS NO LONGER ANY NEED FOR THEM TO STAY SO LOW…
IF YOU THINK THIS MAKES SENSE…IF YOU THINK RATES ARE GOING UP (they actually have already started to do so) AND WANT TO SPECULATE ON THE IDEA, BUYING PUTS ON EURODOLLARS (again, this is NOT the Eurocurrency) IS THE BEST WAY I KNOW TO DO IT.
Here is the option I would recommend at current levels…And on an immediate note, I also kind of think it’s a good idea to get something done ahead of the Fed’s announcement tomorrow…as I can’t imagine that their overall view is going to be “cautious”.
Do note that 50 point swings have been ROUTINE…and I would also remind you that most markets tend to fall much faster than they have gone up…
And just to reinforce my point that the economy is continually putting up strong, healthy numbers…that is to say, is NOT on the shaky legs that all the Wall Street “genius” analysts keep yapping about…here is a rundown of virtually every statistic measure the economy that has come out in the month of July…And as I’ve noted in red, the numbers are repeatedly coming out “better than” than the nitwit financial houses have forecast…And I would also add that NONE of those stats that weren’t “better than expected” even remotely began to signal slowing activity.
Thanks…Pick up the phone and do something with this.
All option prices in this newsletter include all fees and commissions.
The author of this piece currently trades for his own account and has a financial interest in the following derivative products mentioned within: Eurodollars