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Posted October 10, 2025 at 12:18 pm
This morning’s University of Michigan (UMich) US Consumer Sentiment Index came in at 55; however, our forecast contracts are tied to the final release, which is due two Fridays from now on Oct. 24. Meanwhile, the revision history, or the difference between the initial and complete readings are particularly modest, with the average and median in absolute terms standing at 0.95 and 0.7. Against this backdrop, I find the “No” at 56 attractive because it costs just $0.27 and my pricing model shows that it should be at $0.80. The “Nos” at 58, 60, 62, 64 and 66 are also undervalued in my view, requiring adjustments of historic proportions to lose money. Those are ranging from $0.91 to $0.98.
India’s index CPI value is expected to rise to 197.5 from 197 according to the median estimate consisting of 38 forecasters participating in the Reuters monthly poll for September. But the range of potential outcomes is particularly wide, amidst a minimum projection of 196.53 and a maximum of 200.61. Against this backdrop and my analysis that doesn’t support a 0.5% month-over-month drop, I find the risk reward profiles of the “Yes” answers at 194, 195 and 196 attractive. They’re going for $0.89, $0.88 and $0.83.
Source for images: ForecastEx
Note: Prices are highest bids as of the morning of October 10, 2025. Red circles around the thresholds were inserted by J. Torres to highlight his preferred “Yes” and “No” answers throughout different levels.
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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.
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