Backwardation Breakdown

We are still in backwardation. 

Cue Ryan’s booming voice modulator. 

Backwardation occurs when the current price of an underlying asset is higher than prices trading in the futures market.

And it’s not a good sign for the market.

Today during the live Profit Takeover show, Frank Gregory, our friendly neighborhood K street to Wall Street expert, joined to talk about the factors affecting the market today – and how they are contributing to the current state of backwardation. 

We talked about the ramifications of the conflict in Russia, political speculation, and policies’ effects on the market. 

Watch it all here, if you missed us live.

Luckily, no matter who is in office, traders can still make money.

When the market is in backwardation, I like to use this specific trading strategy based on policies, news, and market speculation…

Political occupation of government offices makes little to no difference to the market.

What does affect the market are policies – but only temporarily.

So there are ways to play into the policies and news – by trading options.

We played energy when the conflict in Russia began, by going long in oil.

Frank went long in Ford when EV news and policy first dropped and then shorted when it turned to old news. 

Currently, we are watching the chip sector and will be playing tech names. 

I will be watching my curated scan for cheap options in the tech sector. 

Until next time,

Mark Sebastian

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