• Skip to primary navigation
  • Skip to content
  • Skip to footer
StoneX®

Trade Futures, Spreads and Options with Confidence.

Top Navigation

  • Open a Futures Account
  • Sign Up
  • Log in
  • 1.800.800.3840

Primary Navigation Menu

  • About
    • Who We Are
    • Services
    • Risk Disclosure
    • COVID-19
  • Trade
    • Broker-Assisted
    • Self-Directed / Online
    • Request Pricing
  • Hedge
    • Ag Marketing Plan
    • WASDE Analysis
    • Grain Resources
    • Livestock / Dairy Resources
    • Request Pricing
  • Invest
    • Automated Strategies
    • Managed Futures
    • Request Pricing
  • Advisories
    • GENERAL / FUNDAMENTAL
      • DT Newsletter
      • Insider Market Advisory
      • Turner’s Take Newsletter & Podcast
    • TECHNICAL ANALYSIS
      • The Cullen Outlook
      • Data Feed Trade
      • Jarboe Trading Journal
      • Trade Spotlight
    • AG MARKETING
      • Cattleman’s Advisory
      • Technical Ag Knowledge
      • Turner’s Take Ag Marketing
    • THIRD-PARTY RESOURCES
      • CFRN
      • Moore Research Center, Inc. (MRCI)
      • OptionWorks®
      • TASMarketProfile.com
  • Education
    • CME Group Resource Center
    • CME Group Offers
    • Small Exchange Resources
    • Guides
    • Frequently Asked Questions
    • Order Entry Handbook
  • Blog
    • Futures 101
    • Ag Marketing
    • Tips & Strategies
    • Trading Advisories
  • Resources
    • Trading Software
    • Quotes and Charts
    • Futures Calendars
    • Contract Specifications
    • Margin Requirements
    • Futures Calculator
  • Accounts
    • Apply
    • Access My Account
    • Funding
  • Contact
 

Using Futures to Capitalize on Opportunities During the Coronavirus Pandemic Panic

March 25, 2020 by Daniels Trading| Tips & Strategies

The 2020 outbreak of the novel coronavirus (COVID-19) has driven unprecedented participation in the global financial markets. Heavy daily traded volumes and extreme pricing volatility have become new norms. Although the risk profile is greatly enhanced, active traders are privy to rare opportunities.

No matter which market you are looking at, it is highly likely that extreme pricing fluctuations have defined early 2020. One way to capitalize on the action is by trading futures contracts. In doing so, you can maximize your capital efficiency and benefit from the COVID-19 panic.

Micro E-Mini and E-Mini Equity Index Futures

Late February and early March of 2020 brought a chaotic period on Wall Street, featuring several history-making events. Multiple coronavirus-driven market crashes rivaled those experienced in 1987 and 2008. For the period of Feb. 27 to March 12, the Dow Jones Industrial Average (DJIA), S&P 500 (SPX), and NASDAQ Composite (NASDAQ) were extremely active:

Date DJIA S&P 500 NASDAQ 100
February 27 -1191 (-4.4%) -137 (-4.42%) -414 (-4.61%)
March 2 +1294 (+5.09%) +136 (+4.60%) +384 (+4.49%)
March 9 -2014 (-7.7%) -225 (-7.60%) -624 (-7.29%)
March 10 +1167 (+4.8%) +135 (+4.94%) +393 (+4.9%)
March 12 -2352 (-9.99%) -260 (-9.51%) -750 (-9.43%)

As you can see from the table above, the impact of the coronavirus on U.S. equities was staggering. Emergency rate cuts from the U.S. Federal Reserve, surprise economic stimulus packages, and constant COVID-19 headlines drove unprecedented participation to the markets. Unfortunately for traditional “buy-and-hold” investors, profits could only be secured from bullish bumps in stock prices, not the sell-offs.

One of the premier benefits of equity index futures is flexibility. Trading the Micro E-mini and E-mini equities indices has several key advantages over stocks or ETFs:

  • Implement bullish or bearish strategies
  • Apply enhanced leverage courtesy of reduced margins
  • Pay low all-in commissions and exchange fees, free of management costs
  • Enjoy consistent market depth and efficient market entry/exit

Access to leverage, ability to go long or short, and low cost structure make Micro E-mini and E-mini equity index futures ideal for engaging the U.S. stock markets.

COVID-19 Impact on Commodities

Stocks aren’t the only assets driven directionally by the COVID-19 pandemic. Energies, metals, and ag products have also displayed a keen sensitivity to the spread of the virus.

The impact of the COVID-19 on commodity pricing is multifaceted. During uncertain times, investors often turn to assets such as gold to hedge against unknown risk. This was the case throughout Q1 2020 amid the coronavirus outbreak. From January 1 to March 12, spot gold rallied by 3.8 percent, posting new all-time highs above $1,700.00 in the process.

Conversely, COVID-19 brought serious demand-side questions to the global oil complex. A projected economic slowdown and lagging Chinese consumption caused West Texas Intermediate (WTI) and North Sea Brent (Brent) futures to post multiyear lows. Agricultural commodities faced similar demand-oriented issues. Livestock, grains, and oilseeds all came under immense bearish pressure as COVID-19 hysteria coupled with U.S.-China trade strife ravaged the markets.

Once again, the inherent flexibility of futures provided participants the ability to trade market fundamentals. Whether buying gold futures as a safe haven or selling ag and energies to profit from demand-side uncertainty, futures can help you competently manage the evolving COVID-19 situation.

Using Futures to Trade the Coronavirus Pandemic

On March 11, 2020, the World Health Organization officially labeled the novel coronavirus (COVID-19) a pandemic. As a result, travel bans, stimulus packages, and emergency monetary policy measures were implemented. Subsequently, extreme volatility has become a new staple of the world’s capital markets.

To learn more about how you can use futures to secure market share amid COVID-19 mania, schedule your free consultation with a market pro at Daniels Trading today.

New call-to-action

Filed Under: Tips & Strategies

About Daniels Trading

Daniels Trading is division of StoneX Financial Inc. located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading was built on a culture of trust committed to a mission of Independence, Objectivity and Reliability.

Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

Subscribe To The Blog

Footer

Site Navigation

  • Frequently Asked Questions
  • About Us
  • Customer Reviews
  • Contact Us
  • Futures Blog
  • Open a Futures Trading Account
  • Media Resources
  • Fund Your Account
  • Legal Notices

Contact Us

StoneX Financial Inc.
Daniels Trading Division
230 South LaSalle Suite 10-500
Chicago, IL 60604
+1.312.706.7600 Local / Int'l
+1.800.800.3840 Toll-Free
+1.312.706.7605 Fax

Connect with Us

Trustpilot
Risk Disclosure

The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.

Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.

© 2023 StoneX Group Inc. All Rights Reserved

  • Risk Disclosure
  • Privacy Policy
  • California Residents Privacy Notice
  • Terms of Use
  • Back to top