Back Again So Soon?

An early look at players in uniforms is an annual marketing ploy by the National Football League. Recently, marquee quarterback Tom Brady unveiled his new look with the Tampa Bay Buccaneers after twenty years of service for the New England Patriots.

Source: National Football League

The eventual hall of famer drew an equal amount of cheers and jeers from football fans. One fan, a well-known supermodel, shared her supportive reaction to the new uniform on social media by writing “What a cutie.” Of course, that supermodel is his wife, Gisele Bundchen.

It is unclear if or when football players will once again toss around the pigskin, nevertheless, the National Football League continues to make plans for the 2020 season. Major League Baseball (MLB) and the National Basketball Association (NBA) are also making plans, which currently slate them for a late July start in fan-less stadiums. Imagine only hearing the crack of a bat as it hits a 95 MPH fast ball. Or hearing only the smack of two hands clasping a rebound from a missed shot bouncing off the rim. Strange.

After the Federal Reserve decreed it would expand its purchases of corporate bonds, stocks rebounded 1% for the week ending June 19. Retail sales deserve some of the credit as the 17.7% rise in May over April was a breath of fresh air for the markets.

The 5.9% S&P 500® decline on June 11 caused the Cboe Volatility Index® (the VIX® index) to close above 40 for the first time since April 23. Unsurprisingly, that move also led to a 125% jump in 10-day SPX® realized volatility from the mid-teens to the mid-thirties; levels also not seen since April. That said, as June expiration approached, we enjoyed a relatively quiet week as investor confidence was slowly recovering. By June 18, although the VIX Index declined 19% in a week, it could still be considered elevated with a reading of 32, which equates to 2% daily moves.

Some expirations tend to come and go without much fanfare, but this one had the potential to be different. Volume was expected to be robust due to quadruple witching; the expiration of options and futures on indexes and equities. Almost $2 trillion notional of June SPX options was expiring. That is the third-largest, non-December expiration on record according to data compiled by Goldman Sachs Group Inc. All it takes is the appropriate market moving headline to cause a trader’s portfolio gamma to completely change.