VOLATILITY: HIGH. If that level is broken, I think we can head up to the $11 level. Prices gapped lower today on news that President Trump and the First Lady have been infected with the Coronavirus sending many sectors sharply lower. I have been recommending a bullish position over the last month from around the 299 level. Still, I believe the risk/reward is in your favor, especially if any weather problem comes about in the coming months ahead. These are truly unprecedented levels of implied volatility for the oil market - and for any commodity market. We've dropped about 20% in a rather quick time frame as prices are right at major monthly support. Cboe's volatility indexes are key measures of market expectations of volatility … It looks to move even higher, in my opinion. Search for more papers by this author. Juice prices are still trading below their 20 and 100-day moving average as the trend is lower, but I believe the downside is limited. "Natural Gas is a traded commodity with many industrial and commercial applications. Implied volatility, a determinant of an option’s premium, rose to a record high of 98.6 percent, according to Reuters data going back to 2007. I have been recommending a bullish trade initially from the 111.00 level while adding another contract at 113.30 as the average is around 112.15. I define chart structure as a slow grinding up or down trend with low volatility and no chart gaps. Soybean futures in the November contract is trading higher for the 3rd consecutive session after settling last Friday in Chicago at 10.02 a bushel while currently trading at 10.27, up about $0.25 for the trading week as prices are right near a 29 month high. Natural gas’s implied volatility spiked to 58.7% on May 25, 2016. Test our tools with a 30-Day Trial. The chart structure is outstanding at the current time because prices have gone nowhere over the last couple of weeks. The volatility in wheat will certainly expand as we enter the volatile autumn and winter seasons as the risk/reward remains in your favor as traders are keeping a close eye on key growing regions around the world for short-term price action. Implied volatility has been on the rise since September after holding at very low levels between March and August. Coffee is trading below its 20 and 100-day moving average as the trend is clearly lower as this is a counter-trend recommendation, which I don't do very often. Facebook.com/seeryfutures Since May 25, natural gas has risen 41.3%. If you took those trades, place the stop-loss at the 2 week low, which also is the 3-week low at 109.80 on a hard basis only as I am not willing to risk more than that price level. Implied Volatility - Implied Volatility … Seery Futures That situation isn't going to change as we enter the winter months as seasonably speaking, you can have tremendous price swings daily. The volatility will expand tremendously, especially to the upside, because these prices are very depressed. That compares with an average of 37.0 in 2017, 38.9 during the prior five-years (2013-2017) and 49.4 in the previous five years (2008-2012). The natural gas implied volatilities provide an independent and thorough view into the North American natural gas market. Natural gas futures in the November contract settled last Friday in New York at 2.80 while currently trading at 2.43, down about 37 points for the week, hitting a 2 month low.. CME said open interest in its Henry Hub gas benchmark has hit at least 10 open interest records since August, reaching an all-time high of 1,699,571 contracts on Oct. 4. I think commodities across-the-board look to move higher as we enter 2021 as, historically speaking, prices still look relatively cheap. I am not involved as the volatility is extremely high. Its current implied volatility is 2.9% above its 15-day average. VOLATILITY: HIGH. Twitter–@seeryfutures TREND: HIGHER Persistent changes in volatility can affect the risk exposure of producers and industrial consumers of natural gas … The increases in volume and volatility came after the front-month contract jumped to its highest since 2014 on Wednesday on forecasts for much colder weather than previously expected in November. the sources of this high volatility. U.S. natural gas futures volume and implied volatility on the New York Mercantile Exchange (NYMEX) hit all-time highs on Wednesday after the front-month contract soared more than … TREND: HIGHER TREND: LOWER - MIXED The volatility in this week’s natural gas market, which included a roaring 30.2-cent advance in Monday’s session, could become commonplace for the next couple months, according to TPH. Coffee futures in the December contract settled last Friday in New York at 113.65 a pound while currently trading at 108.20, down over 500 points for the trading week. VOLATILITY: AVERAGE. My opinion in this blog are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any futures or option contracts. Returns and volatility in the NYMEX Henry Hub natural gas futures market. Prices reacted very positively off of the crop report, which was released early in the week. For natural gas , its implied volatility was 43.9% on October 28, 2016.Its 15-day average implied volatility is 42.7%. Since September, gas futures have traded up or down more than 3 percent eight times, compared with just one time from March to August and 13 times in January and February. Historical volatility has surged to levels not seen since late 2018, and implied volatility, a measure of how dramatic price swings may be going forward, is the highest in data going back to … So stay long as the risk/reward remains in your favor, and I think the price gap created today will be filled to the upside. Soybean meal futures in the December contract settled last Friday in Chicago at 338 a ton while currently trading at 352 as prices have hit a 27-month high continuing its bullish momentum higher for the 3rd consecutive session. This value is the market's estimate of how volatile the underlying futures … Wheat prices are trading above their 20 and 100-day moving average as this trend is strong to the upside. However, for the bullish momentum to continue, prices have to break the September 30th high of 5.87, in my opinion, and if that does occur, I think the $6 level is at hand, so stay long as there is still room to run. Detailing Henry Hub and other basis locations, the implied volatility data gives … Dry weather in Brazil has already affected the sugar crop as the La Nina weather pattern could throw a wrench into the closet. Argus North American Natural Gas Implied Volatility Forward Curves “Argus Gas Volatilities” represent the market’s current price volatil-ity valuation for call, put and straddle options on a monthly basis. Furthermore, Seery Futures is not responsible for the accuracy of the information contained on linked sites. Implied volatility shows how much movement the market is expecting in the future. Traders said the combination of colder forecasts and the low amount of gas in storage going into the winter heating season brought a return of volatility that resembled the gas market of old. Natural gas futures in the November contract settled last Friday in New York at 2.80 while currently trading at 2.43, down about 37 points for the week, hitting a 2 month low. Even so, the highest 30-day ATM implied volatility for natural gas … However, some stabilized later in the day. Cattle futures in the December contract is currently trading at 111.05 after settling last Friday in Chicago at 111.40 unchanged for the week, looking for some fresh fundamental news to dictate short-term price action next week. TREND: LOWER CHART STRUCTURE: POOR But for many of the world’s most vital financial and commodity … I am not involved as the volatility … Fundamentally speaking, industrial natural gas demand remains tepid as BNEF data shows gas demand from power generators was estimated at just under 30 bcf for last Monday, which is the lowest for any September 21st since 2015. We will start to get real-time production numbers as the combines are in full swing in the Midwestern part of the United States as the volatility should continue to escalate to the upside. Benchmark Henry Hub natural gas futuresare typically considered to be the most volatile of the major commodities because of the sudden impact of cold weather on deman… VIX measures the implied volatility … Carryover levels for soybeans continue to decline, coupled with the strong demand from China's country as fundamentally and technically speaking, this market is strong. Tuesday’s high surpassed the previous record of 1,022,858 contracts set on Jan. 12, the CME said. Frank has crunched the numbers and put a solid set of metrics around seasonal implied volatility … However, the chart structure will not improve for another 8 trading sessions; therefore, you will have to accept the monetary risk at this time. Getting started is easy! Intercontinental Exchange – Futures Implied Prices – August 2020 Page 1 ICE Futures Implied Prices ICE Futures has expanded implied pricing capability for each of its Futures contracts. Understanding volatility in natural gas and crude oil markets is important for several reasons. Many of the great trends that develop have very good chart structure with many low percentage daily moves over a course of at least 4 weeks thus allowing you to enter a market allowing you to place a stop loss relatively close due to small moves thus reducing risk. Natural Gas Futures. Our Standards: The Thomson Reuters Trust Principles. However, I'll keep a close eye on this commodity as we enter the highly volatile autumn and winter season. CHART STRUCTURE: EXCELLENT I have been recommending a bullish position from around the 9.14 level. Futures are above The Cboe Global Markets ® (Cboe ®) calculates and updates the prices of several volatility indexes that are designed to measure the market's expectation of future volatility implied by options prices. What do I mean when I talk about chart structure and why do I think it’s so important when deciding to enter or exit a trade? CME Group Inc, which owns the NYMEX, said total futures volume rose to a preliminary record high of 1,602,673 contracts on Wednesday, topping the previous high set on Tuesday of 1,232,635. Implied volatility fell to a record low 19.2 percent in late July. CHART STRUCTURE: POOR In my opinion, I believe prices are starting to experience oversold conditions as prices topped out at 135.45 on September 4th. Options with high levels of implied volatility suggest that investors in the underlying stocks are … Options with high levels of implied volatility suggest that investors in the underlying stocks are … Fields displayed on the Futures Volatility & Greeks View include: Strike - The price at which an option purchaser may buy or sell the underlying commodity futures contract regardless of its current price. With the Coronavirus sending many sectors sharply LOWER are right at major monthly.. 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