Could the jobs number send us into correction?

With ES futures currently trading at 1550.25, the at-the-money straddle is implying a move of 11.75 points by tomorrow’s expiration. This gives us an upside target of 1562 and a downside target of 1538.50. Now that we have targets, we can use them to look at possible options strategies.

Possible Bullish Set-up:

Buying the ES Apr 5th Weekly 1555-1565 Call Spread for 2.45
Risk: $122.50 per 1 lot
Reward: $377.50 per 1 lot
Breakeven 1557.45

Possible Bearish Set-up:
Buying the ES Apr 5th Weekly 1550-1540 Put Spread for 2.40
Risk: $120 per 1 lot
Reward: $380 per 1 lot
Breakeven: 1547.60

Both of these trades are setting up for great risk vs. reward ratios and offer a trader a risk effective way to speculate on the unemployment number.

About the Author
James Ramelli

James Ramelli is the Moderator of the Live Futures Options Trading Room at KeeneOnTheMarket.com where he actively trades futures and options on futures while educating members on strategies, setups and risk management. He has a degree in Finance with a focus in Derivatives Trading and Financial Engineering from The University of Illinois and has been trading for five years. James appears regularly on Bloomberg T.V. and BNN and writes a weekly column for Futures Magazine.

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