Initial unemployment claims have exceeded 220,000 for 12 consecutive weeks. I expect that next week will be the thirteenth. The indicator is poised to remain range bound since a climb above 250,000 typically occurs during periods of economic stress. Indeed, filings have only exceeded 250,000 once in the past 22 months and a surge isn’t in the cards, in my opinion. I’m projecting 235,000, and heading into the print, I like a combination trade that consists of purchasing the “Yes” and “No” answers at the 220,000 and 250,000 thresholds, which cost $0.83 and $0.81 for a total of $1.64. The trade delivers $2.00 back to the investor on a number as low as 221,000 or as high as 250,000 while the max loss stands at $0.64 if it arrives outside of those parameters. Furthermore, I also find the risk-reward attractive for the “No” at the 260,000 level, priced at $0.92.
Source for Images: ForecastEx
Note: Prices are highest bids as of the morning of July 3, 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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