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Posted May 7, 2025 at 11:20 am
Initial unemployment claims have been trending higher in recent months, with the four-week moving average remaining above 220,000 for 10 consecutive weeks. Forecasters believe that tomorrow morning’s update will mark the eleventh, as the median estimate stands at 230,000. Meanwhile, weekly initial claims have failed to exceed 260,000 for 42 consecutive months going back to October of 2021. The recent rising trend, expectation of 230,000 and tendency to stay below 260,000 supports the argument for a combination strategy, in my opinion. In light of current pricing, I like buying the “Yes” answer to the Contract asking, “Will US Initial Jobless Claims exceed 220,000 for the week ending May 3, 2025?” for $0.80 and the “No” answer at 260,000 for $0.92. The trade costs a total of $1.72 and pays out $2.00 on a figure as low as 221,000 or as high as 260,000.
Finally, I also like the “Yes” answers at 190,000 and 200,000 for $0.96, as well as the “Yes” answer at 210,000 for $0.95, which is the ForecastEx Pick of the Week. Additionally, I like the “No” answers at 270,000 and 280,000 for $0.93 and $0.94, respectively.
Source for Images: ForecastEx
Note: Prices are highest bids as of the morning of May 7, 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.
This is commentary on economic, political and/or market conditions within the meaning of CFTC Regulation 1.71, and is not meant provide sufficient information upon which to base a decision to enter into a derivatives transaction.
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