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Thursday, December 23, 2021 – Normal Market Close Time. However, since the markets will remain closed until Sunday – we will require *Any open positions must meet Exchange Maintenance Margin 15 minutes before the market close (3:45 pm CST).
2021 Key Takeaways with Craig Bewick of the CMEGroup.com
What a year it’s been… again. Even though there are still 7 more trading days left in 2021, and much could change in the next 7 trading days, we decided to take an assessment of where we’ve come since 12/31/2020.
- S&P 500 and Nasaq-100 futures prices were up by over 20%; E-mini S&P 500 options implied volatility is trading at just about the same level as it was a year ago
- Even though it’s trading well off its highs of the year, WTI Crude Oil futures prices are up by nearly 50%
- Gold futures prices were a bit “range bound” this year. However, if we look at implied volatility as one measure of potential price movement, the average closing 30-day implied volatility in 2021 was nearly equal to the average closing level since December of 2011. Also, if we look at it by year, the average closing level in 2021 was 14.2%; higher than 2017 (10.7%), 2018 (9.8%) and 2019 (10.8%).
- US Treasury yields increased. The 10-Year yield is up from under 1% to nearly 1.5%. We used data from the St. Louis Fed to get the 12/31/21 value and compared it to the current 10-Year Micro Yield futures price so it’s not perfect, but does provide an indication of the yield increase. Of course, as Jim Iuorio pointed out in a recent Yield Insights video that was published here, the last time inflation readings were at the current levels, the 10-Year yield was near 12%.
- Soybean futures prices, after a year of historic volatility, wound up almost unchanged on the year. We downloaded data from QuikStrike to verify this and included the graph below in which the orange line depicts the price level at the beginning and end of the year.
- Natural Gas futures prices have also been characterized by historic volatility and, even though they are trading well below this year’s high levels, are still 50% higher than a year ago
- In a year that saw CME launch several new cryptocurrency products, Bitcoin has increased in price by about 66% and implied volatility, while still among the highest compared to other CME options products, has come down from over 100% to about 78%
So, in a year that was not short of potentially market moving headlines and seemingly as more questions than answers remain, we hope all of our In FOCUS readers have enjoyed our daily commentary.
We wish everyone a very happy and healthy holiday season and good trading year in 2022.
Craig Bewick has spent 25 years in futures and options markets, starting at CBOT and CME working in risk management, regulatory, technology, product management and client development.
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