QCP Weekend Colour - 8 Jun 24

- A doubly strange session overnight starting with:

1. Strong upside surprise on NFP (272k vs 182k), higher payrolls that came with higher unemployment (from 3.9% to 4.0%). It was confusing enough to trigger a risk-off ahead of US inflation numbers and FOMC next Wed.

2. Followed by a Roaring Kitty live stream which had almost a million viewers, during which GME stock price crashed. It was probably not a coincidence that Alts and Memecoins started collapsing as well with over $40 billion wiped in market cap.

- Our desk saw bullish flows on this dip, both sellers of aggressive puts and buyers of call spreads especially in BTC.

- BTC and ETH have since bounced off the lows of 68.3k and 3575.

- We agree that this is a good opportunity to buy the dip as the markets will increasingly price in at least one Fed rate cut from here. It will be difficult for the US to ignore as the rest of the world continues to cut rates.

Trade Idea:
Maximum upside at zero cost with ERKO Seagulls.

BTC 27-Dec ERKO Seagull
Buy 75k call with 125k knock-out
Sell 60k put
Cost: ZERO
Max payout: 150.5% pa or $50k per BTC if spot price is just below 125k level at expiry.
(Spot ref: 69,200)