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What are Ag Options Traders ‘Smiling’ About?

Our recent article on options on agricultural products marveled at the relatively low prices of at-the-money (ATM) options, especially in the face of a gathering La Niña, albeit a relatively mild one so far. As interesting as ATM options are, out-of-the-money (OTM) puts and calls are also telling their own …

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Anatomy of an Equities Correction

Equities have bounced back from correction territory but how will the pace of Fed rate hikes, rising budget deficits and inflation impact stocks and bonds.

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La Niña: Calm Before the Storm in Ag Markets?

Corn, soybean and wheat markets are witnessing an odd juxtaposition – the onset of a La Niña and exceptionally low options’ implied volatility (Figures 1 & 2).  Why this is unusual is that corn, soybeans and wheat often experienced exceptionally high volatility (about 1.3-1.5x normal) during many of the past …

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Could Equities Jitters Affect Pace of Fed Rate Hikes?

Is a Fed rate hike in March a certainty? If the correction in equity markets is prolonged, the central bank could decide to postpone any increase until June.

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Three Least Likely FOMC Meetings to Hike Rates

The Federal Open Market Committee (FOMC) of the Federal Reserve (Fed) did nothing at its January 31 meeting; however, Federal Funds futures are signaling as many as three rate hikes are probable in 2018.  In this report, we take another perspective, and explain which are the least probable FOMC meetings …