Aug. 18th, 2025 Option Outlook

Alaska Summit Drama

Good Morning! Markets whipsawed, but ultimately closed lower towards 6450.

The Alaska summit was supposed to be the crown jewel in Trump’s bid for the Nobel Peace Prize. Pomp and circumstance uncommon for Alaska resulted in Trump trying to get Putin to agree to peace. Putin saw right through it. While politically Trump had the upper hand, personally Putin had the leverage. Putin’s economy is the one struggling, he has lost millions of men to war, he is still in a war that he thought would take weeks, and it has been 3.5 years. Yet, Putin had the leverage over Trump because Trump wants a Nobel Prize, as stated in a prior interview… and he can’t do it without Putin’s cooperation.

There was quite a bit of event vol for Friday and today, what will the outcome be?

This week should be interesting. If we manage to advance markets above 6470, we can easily advance towards 6500. 6500 is a very strong resistance, I don’t expect to advance substantially past there.

On the downside, there is very little support. Aggregate vanna is positive for the week as well as overall, so there is a chance that we can advance past the 6470 region, but that can easily be overcome by macro forces, as aggregate vanna isn’t very high.