Jul. 3rd, 2025 Option Outlook

Vanna Rise

Good Morning! Positive vanna strikes again, but we are entering into a major resistance zone. SPX advanced .4%

Today is the release of the non-farm payrolls report, and the market is once again discounting it. The 1 day straddle is just $32. Even though it is a half day, around 6 months ago this number would be in the $50s. The NFP report came in outperforming, which should be a bullish run, but will remove rate cut projections for July. What will happen after the positive NFP report?

This is vanna for today. While positive, the upside is limited to 6250, which is only 23 points to the upside.

Next week is also positive vanna with a strong resistance at 6300. While these vanna numbers are decent, there isn’t a ton of event vol for today’s NFP report, so I wouldn’t expect a runaway train.

Don’t forget that next week is the tariff deadline. Yesterday there was a positive report on Vietnam accepting a trade deal. While that is in the second tier of importance, I’d want to see trade deals with Canada, China, Mexico, and the EU to be confident in a bullish run. The second tier would be India, Japan, Vietnam, and Taiwan. While at-the-money vol is high, skew is extremely low, discounting any strong moves. It would be a good idea to buy skew, knowing that 6300 is strong resistance (unless trade deals come in). If tariffs are enacted on July 9th, there are only pockets of support down to 6000. There’s a lot of premium selling below 6175 as well, so if that’s you, I’d beware.