On December 22nd, the United States released the gross national economic product (GDP) data for the third quarter. Data show that the US GDP grew by 3.2% in the third quarter. It was much higher than the expected growth of 2.9%.
More importantly, although the Federal Reserve Bank of the United States has been increasing interest rates substantially in 2022, in the third quarter, personal consumption in the United States not only did not decrease, but increased by 2.3%. This data surprised almost all economists.
When the news of the good economic situation came, the American stock market plunged sharply. Bulls in American stock markets around the world were caught off guard.
US GDP growth is higher than expected, facing the Fed's tightening policy?
Prior to this, Wall Street investment banks and economists around the world agreed that after a year's efforts, the Federal Reserve's monetary tightening policy will come to an end in the first half of next year, the global economy will enter recession, and the stock market will end its bear market course.
But America's strong third-quarter economic data is a clear negation of the Federal Reserve's year-long tightening of monetary policy. In other words, it is whether the Federal Reserve's tightening policy has brought the expected effect. The third quarter GDP data released on December 22nd obviously tells the market that the policy of raising interest rates has not brought the expected effect, and the Federal Reserve will continue to make efforts to raise interest rates next year.
The biggest enemy of the stock market is high interest rates. Thus, on December 22nd, the reason why the American stock market plunged is self-evident.
Under such circumstances, how should investors invest in the US stock market? My personal opinion is that investors should continue to buy American stock index options （Buy Straddles ） and wait patiently for the end of the bear market in American stock market.
Make good use of US stock index options and wait for the bear market to end
American stock index derivatives market is the most mature stock index derivatives market in the world at present. Taking CME as an example, there are dozens of stock index derivatives products for everyone to choose from.
Everyone is familiar with E-Mini S&P index futures and E-Mini S&P index standard options of Chicago Mercantile Exchange, but you may not have noticed that Chicago Mercantile Exchange trades E-Mini S&P index ultra-short-term Weekly options with three different maturity dates at the same time. Now let's briefly introduce these three E-Mini S&P weekly options with different maturity dates.
First, the E-Mini S&P index standard option is an American option, which means that the holder of the option can exercise it at any time.E-Mini S&P index short-term weekly option is a European option,That is to say, the holder can only exercise the right on this day of the maturity date.
Second, the expiration dates of these three short-term weekly options are 3:00 p.m. Chicago time every Monday, Wednesday and Friday. The trading codes of short-term weekly options due on each Monday are E1A, E2A, E3A and E4, which represent the trading on different maturity dates on four Mondays of each month. The trading codes of short-term weekly options due every Wednesday are E1C, E2C, E3C and E4C, which represent the trading on different maturity dates on four Wednesdays of each month. The trading codes of short-term weekly options due every Friday are EW1, EW2, EW3 and EW4, which represent different maturity dates on four Fridays of each month.
Third, these three short-term weekly options are spot handover, and the handover products are E-Mini S&P index futures (ES) of the current month.
What are its benefits?Its biggest advantage is that the buyer of options can get the maximum profit with the minimum cost.
In addition to the above three short-term weekly options, Chicago Mercantile Exchange launched the E-Mini S&P Index weekly options due on Tuesday and Thursday on April 25 this year. These two weekly options are European options, which means that only the expiration date of the transaction can be exercised. The transaction codes of the two are Tuesday: E1B, E2B, E3B, E4B and E5B; Thursday: E1D, E2D, E3D, E4D, E5D. With these two weekly options, the global US stock index derivatives traders can enjoy trading "doomsday options" every day.
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