Are We Headed for Contango?

BY MARK SEBASTIAN 

April 29, 2025

Hey Traders,

 

Monday was actually kinda sleepy.

 

The S&P 500 had about a 1% range and ended the day essentially unchanged:

But there were some producing things.

 

The Bond Market is starting to really recover; TLT looks like it might be heading to 90.

 

And then there’s the VIX. The index ended just above 25, and the VIX curve flattened even further on Monday:

The spread between June and May is down to .35 basis points, and June and July are literally on top of each other.

 

There’s a real chance the VIX curve goes into contango this week.

 

I also like what I see in the IWM (the Russell 2000).

 

I am long the IWM May 5, 2025 195 calls.

 

You need to join Licia in her masterclass. I use her pitchforks and pivots for my trading – you should learn how to implement them. Last chance to join here.

 

Let’s Recap Yesterday’s Trade

 

We put on a couple of new trades. I’m looking for the market to open on Tuesday, and then I’m looking for the Russell 2000 to have a nice week as well.

 

…Today’s Outlook

 

I am liking the market higher on Tuesday and into Wednesday. Once earnings happen with MSFT and META, all bets are off. We also have non-farm payrolls looming.

 

Call Ted if you aren’t currently a member – 888 872 3301.

Your Only Option,

 

Mark Sebastian

 

Mark Sebastian

Founder & CEO, Option Pit

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Mark Sebastian

Mark Sebastian

Mark Sebastian is a former member of both the Chicago Board Options Exchange (CBOE) and the American Stock Exchange (AMEX), where he spent years mastering the art of options trading in the most competitive environment imaginable. As Chief Investment Officer at the hedge fund Karman Line Capital, Mark manages sophisticated options strategies for institutional clients. He is the author of two highly regarded books on options trading: ‘The Option Traders Hedge Fund’ and ‘Trading Options for Edge.’ Mark is a frequent guest on major financial networks including CNBC, Fox Business News, Bloomberg, and First Business News, where he provides expert commentary on market volatility and options strategies.

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About the Author

Mark Sebastian

Mark Sebastian

Former CBOE floor trader and CIO at Karman Line Capital. Author of ‘The Option Traders Hedge Fund’ with over 30 years of options trading experience.

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