September 20, 2016
I will reiterate that all the talk about “rates going lower” or maybe “going negative” or “staying low” are classic after-the-fact talking head garbage…Short term interest rates DID go lower…but they have been rising for several months now…and I believe will FORCEFULLY continue higher for at least the next few years.
I also believe that whether or not the Fed does raise rates tomorrow is immaterial. As I keep saying, the marketplace will do it for them…and THEN the Fed will respond.
I CONTINUE TO RECOMMEND BUYING THE JUNE 98.87 PUTS, FIRMLY BELIEVING THEY WILL SOON BE IN-THE-MONEY AND BEGINNING TO TRADE LIKE FUTURES CONTRACT.
Here is a chart of how the numbers and dollars work with this option…And then be SURE to take a good look at the chart that then follows...
Here is a chart of the actual Eurodollar 90 day Interest Rate…and I remind you that as it goes up, Eurodollar futures will go down.
DOES 1.5% or 2.0% look AT ALL hard to imagine?
I CONTINUE TO VIEW THIS AS A TRADE UNLIKE ANYTHING I HAVE EVER SEEN IN THIS BUSINESS.
Call me if you want to do something with it.
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