Treasury Trading Update

Price action was choppy following the release of retail sales and PPI this a.m. Numbers were above consensus however the initial move was an uptick with decent volume. The gains were short lived and currently prices pressing the session lows.

Market seems to be reacting also to a Smick-Medley report indicating the composition of the FOMC will be getting a bit more hawkish in 2011. Given Bernanke’s current support however I would agree with comments made that the changes will not affect policy.

Meanwhile bullish flows continue in ED options as we head into this afternoons FOMC announcement.

Larger flows from a.m. session.

12/14/2010
JP Morg	B	10,000	EDH 9925/9937.5 p spread	1.2	9958 area
Paper	S	5,000	EDH 96/97 c1X2 vs. EDM 90 p	2 put over	H 59 M 44 area
New Edge	B	5,000	EDZ1 93/96 c1X2 vs. EDU 9825p	2 and 2.5 csprd	N/A
Smith B	B	3,000	EDM1 9912 p	9	9945/45.5
Paper	S	1,500	EDH13 9800 strad	63 and 92.5	9805.5/06
New Edge	B	5,000	EOU 75/80 ps vs EDU 9825p	2.5  EO over	N/A
They did this trade yesterday as well
Paper	B	10,000	EDH13 9825/9850 c spread	1	9800
TJM	B	3,000	EDM/U/Z 96 c strip	10	N/A
Bought this yesterday @ 10.5 on 10K
Paper	S	8,000	EOF 9900 strad	0.26	N/A
TJM	B	10,000	EDM13 9887/9900 c spread	1	9769.5/70
Paper	B	5,000	EDZ95/96/97 c fly	2.5	N/A
Paper	S	2,000	EDF/EDH 9962 c calendar	4	N/A
Fed Fund
New Edge	S	500	FFZ 9981 strad	1.5	N/A
Fortis	B	1,000	FFF 9981 strad	2.25	N/A
TY
Smith B	S	2,500	TYH125c	0.17	12009/09.5
Smith B	S	2,500	TYH125c	0.16	12007/07.5
Merril	B	4,000	TYG117.5p / TYH125c	.09 and .07 2K ea.	^12008.5 and 12
Merril	S	5,000	TYH125c	.16 and .17	12007 to 10
Merril	B	5,000	TYG117p vs TYH124.5c	.01  put over	^12007
Paper	B	2,200	TYF124p	3.44	^ 12011
Vision	B	10,000	TYH115p	.22 and .23	12003/04
Mann	B	1,000	TYH116/119 psprd vs 123c	.12 ps over	N/A
Smith B	S	1,000	TYH118/123 strangle	0.55	12000/01
CCM	B	500	TYH120 strad	3.29	12000/01

 

Comments

[stock ideas]

Probably choppiness till January.