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Posted May 27, 2025 at 10:53 am
Economist expectations signal another period of range bound initial unemployment claims following three consecutive weeks right under 230,000. The median estimate for this Thursday’s report is exactly 230,000 and would mark the 14th consecutive seven-day period in which the indicator’s four-week moving average exceeded 220,000.
My economic outlook supports the potential for an uptick in claims but not a significant decline. I’m forecasting a figure near the consensus at 231,000 for this Thursday, while keeping in mind that claims haven’t arrived above 260,000 in almost four years. In light of my view of the road ahead as well as the historical trend, I like a combination trade pairing the “Yes” answer at the 220,000 threshold for $0.82 and the “No” answer at 260,000 for $0.94. The combination trade costs $1.76 and delivers $2.00 back to the investor on a number as low as 221,000 or as high as 260,000.
I also like the “No” answer at 270,000 for $0.95 and believe it has a favorable risk-reward profile.
Source for Images: ForecastEx
Note: Prices are highest bids as of the morning of May 27, 2025. Red circles around the thresholds were inserted by J. Torres to highlight his preferred “Yes” and “No” answers throughout different thresholds.
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This material is from IBKR Macroeconomics, an affiliate of Interactive Brokers LLC, and is being posted with its permission. The views expressed in this material are solely those of the author and/or IBKR Macroeconomics and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Interactive Brokers LLC is a CFTC-registered Futures Commission Merchant and a clearing member and affiliate of ForecastEx LLC (“ForecastEx”). ForecastEx is a CFTC-registered Designated Contract Market and Derivatives Clearing Organization. Interactive Brokers LLC provides access to ForecastEx forecast contracts for eligible customers. Interactive Brokers LLC does not make recommendations with respect to any products available on its platform, including those offered by ForecastEx.
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Displayed outcome information is based on current market sentiment from ForecastEx LLC, an affiliate of IB LLC. Current market sentiment for contracts may be viewed at ForecastEx at https://forecasttrader.interactivebrokers.com/en/home.php. Note: Real-time market sentiment updates are only active during exchange open trading hours. Updates to current market sentiment for overnight activity will be reflected at the open on the next trading day. This information is not intended by IBKR as an opinion or likelihood of a potential outcome.
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