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2020’s 5 Hottest Trading Markets

This has been a historic year in the capital markets, headlined by the novel coronavirus (COVID-19) pandemic. A true black swan event, the COVID-19 outbreak injected unprecedented uncertainty into the world’s financial system. If you’ve been active in the markets since Jan. 1, then you’re hip to the huge volatility and volumes of 2020.

So what are the five hottest trading markets for 2020? Let’s take a look at the top futures contracts from the equity, currency, and commodity asset classes.

1. E-mini S&P 500

A staple of the equity index offerings from the Chicago Mercantile Exchange (CME), the E-mini S&P 500 (ES) has been on fire throughout the coronavirus contagion. Beginning in late February, this market has witnessed several historic sell-offs, epic volatility, and a robust recovery.

One of the great things about the E-mini S&P 500 trading markets is that they provide traders with the utmost in liquidity. CME Globex volumes regularly eclipse 2 million contracts per session, all but guaranteeing robust market depth.

Throughout March 2020, average daily volumes (ADV) on the front-month ES contract measured several times established norms. In the process, trading was repeatedly “halted” as crashes in pricing triggered the 5 percent overnight circuit breaker and the 7 percent U.S. session threshold.

2. West Texas Intermediate (WTI) Crude Oil

Unless you’ve been living under a rock—or in quarantine—you have probably heard about the tumult facing the global oil complex. As a result of the COVID-19 economic shutdown and a heated Russia-Saudi Arabia price war, an atypical supply glut made crude oil temporarily worthless.

On April 20, 2020, the energy market panic hit a crescendo as May WTI futures closed at a record low of -$37.63 per barrel. One day later, the May WTI contract expired priced at $10.01 per barrel―a 24-hour rally of $47.64. The rebound was a preview of the 88 percent rally in May, the largest single-month spike on record. If you’re looking to define the term resilient, look no further than the WTI trading markets for May 2020.

Read our guide, Basic Training for Futures Traders, and discover 50 of the best tips from experts.

3. E-mini NASDAQ 100

Decades from now, financial historians will refer to March 2020 as the quintessential example of how fear can negatively impact the capital markets. However, April, May, and June 2020 for the E-mini NASDAQ 100 are clear illustrations of just how fast an irrational market can recover.

Composed of companies from the technology and growth sectors, the NASDAQ 100 reacted violently to the onslaught of COVID-19. Accordingly, prices of the September E-mini NASDAQ 100 plummeted by 7.90 percent during March. Nonetheless, merely 90 days removed from March’s panic-induced lows, the September E-mini NASDAQ 100 had posted fresh all-time highs amid a furious 52 percent rally.

4. Gold

Gold’s performance during the first half of 2020 offers a basic tutorial of how a safe-haven asset should behave. Although pricing charts for 2020 gold futures trading markets don’t show a rocket ship to the moon, they do illustrate consistency during a bona fide financial crisis.

From Jan. 1-June 1 2020, August 2020 gold futures rallied by $209.80 per ounce―a net gain of 13.6 percent. Still, the six-month period regularly featured extreme intraday volatility. On March 13, gold lost 4.62 percent; 10 days later, on March 23, the bullion market rallied 5.76 percent, regaining earlier losses. Although gold bugs did well during the first half of 2020, the path to profitability was anything but boring.

5. Euro FX

2020 proved to be a hyperactive year for currency traders as the global monetary system faced a collection of unique challenges. In an attempt to provide emergency COVID-19 liquidity, central banks around the globe implemented aggressive quantitative easing (QE) packages.

Subsequently, the world’s most frequently traded currency pair, the EUR-USD, exhibited acute volatility. For spring 2020, September Euro FX futures posted a high of 1.15680 and low of 1.07060 ― a truly astonishing 1724 tick range. To say the least, rate cuts, subprime lending, and massive debt purchases sent foreign exchange rates into a state of flux.

Futures Trading Markets Have Something for Everyone

No matter whether you’re an equity, currency, or commodity trader, CME futures offer a wide range of vibrant trading markets. To learn more about how to get started successfully, check out Daniels Trading’s online e-book Basic Training for Futures Traders.

Basic Training for Futures Traders

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Risk Disclosure

This material is conveyed as a solicitation for entering into a derivatives transaction.

This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.

Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.

You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the “risk disclosure” webpage accessed at at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.

About Daniels Trading

Daniels Trading is an independent futures brokerage firm located in the heart of Chicago’s financial district. Established by renowned commodity trader Andy Daniels in 1995, Daniels Trading is built on a culture of trust committed to the firm’s mission of Independence, Objectivity and Reliability.

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