Tomorrow is another busy day from a forecast contract and economic calendar perspective. Unfortunately, I don’t see any compelling homeruns for this Thursday, unlike in yesterday’s commentary, which identified ForecastTrader Contracts that posted strong returns in retail sales and industrial production. Nevertheless, I have identified potential base hits, because I think initial claims, building permits and housing starts will remain relatively range bound when the data is released tomorrow at 8:30 a.m. E.T.
In terms of my favorite combination trade, I like the risk/reward profile of permits the most, followed by claims and then starts.
For permits, I like buying the “Yes” answer at $0.76 for the 1.40 million threshold and the “No” answer for $0.84 at the 1.55 million threshold. This trade would cost a total of $1.60 and deliver $2.00 back to the investor if both sides are correct.
Similarly, I like buying the “Yes” answer at $0.91 for the 1.296 million threshold and the “No” answer for $0.88 at the 1.596 million threshold in housing starts. This trade would cost a total of $1.79 and deliver $2.00 back to the investor if both sides are correct.
Finally for claims, I like buying the “Yes” answer at $0.84 for the 210,000 threshold and the “No” answer for $0.91 at the 260,000 threshold. This trade would cost a total of $1.75 and deliver $2.00 back to the investor if both sides are correct.
In conclusion, an investor that pursues all three combinations for a total cost of $5.14, would get $6.00 back if my analysis proves correct.
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Note: Prices are highest bids as of the morning of April 16, 2025.
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