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Key Headlines:
CME and Shanghai Raise Margins on Gold, Silver, Precious Metals
Jobless Claims Dip Below 200k
Oil: Inventories near lows, output at peaks
China: Manufacturing PMI unexpectedly above 50 after 8 months
Markets: Illiquid session to close the year
CME and Shanghai Raise Margins on Gold, Silver, Precious Metals
CME Raises Margins for Second Time in a Week:
Silver +30%
Gold +9%
Platinum +25%
Palladium +22%
Effective After Close on 12/31/2025
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Shanghai Also Raises Silver Margin by Additional 20%
Reason:
Margins are based on potential losses of positions, so when volatility rises, loss potential increases → Exchanges require more margin to open and maintain positions
Impact:
But highly leveraged positions will need more funds to maintain or face partial liquidation
→ This triggered Monday's sharp selloff, and markets remain under pressure. Chinese exchanges closed for 3 days (31, 01, 02) so Asian buying will be weak
Jobless Claims Dip Below 200k
Initial claims last week fell to 199k, below 219k forecast and 215k prior week
Lowest Since Thanksgiving
One of the lowest readings in reports dating back to 1969
Continuing claims fell to 1.866 million from 1.913 million prior week
→ Optimistic figures, but unclear if reversal follows holiday slowdown in temporary hiring demand
Oil: Inventories near lows, output at peaks
Oil inventories last week -1.934 million vs +500k forecast and +400k prior
Gasoline inventories +2.86 million vs 1.1 million forecast and 4.8 million prior
Oil prices down another 0.6% today despite inventories ex-SPR at lowest since 06/2025
Output remains at peak 13.8 million bpd even as rig count continues sharp decline
→ 2025 officially worst year for oil prices -20% since COVID 2020
China: Manufacturing PMI unexpectedly above 50 after 8 months
Manufacturing PMI surprises at 50.1 vs 49.2 expected and 49.2 prior
First reading above 50 in 8 months
Services PMI 50.2 vs 49.6 expected and 49.5 prior
Composite PMI 50.7 up from 49.7 prior
→ Signs of improvement to boost end-of-year consumption and production.
Markets: Illiquid session to close the year
Major indexes largely unchanged
Heatmap
Internal flows show selling pressure but on thin liquidity, VIX nearly flat
Structurally, nothing new with volatility at lows
SPX current level of 6900 broken but can't confirm. Gamma extremely thin post-December OpEx as traders yet to initiate positions.
Today marks Q4 JPM Collar Trade expiration:
-35.6k 12/31 -6955C
+35.6k 03/31 +6290P/5310P Spread
→ SPX currently below upper strike of JPM Collar, bearish bias post-roll
Expected:
-34k 03/31 7165C
+34k 03/31 +6535P/5500P Spread
→ Generates short delta for trade → bearish bias
However, due to trade's massive size and execution window 1PM-3:50PM ET, JPM must go long 0DTE options to stay delta neutral
→ Hidden Mechanic: The Drift
JPM buys deep ITM 0DTE Calls (bridge during roll)
Dealers (sellers) short 0DTE ITM Calls → Dealers immediately buy futures/ETFs
→ Creates upward market pressure. Usually not enough for 'drift' but with weak volume today → drift flow pushes SPX to 6900 by 1PM ET.
Focusing solely on JPM Collar, bullish flow continues until SPX hits 6900 (max delta) or JPM completes trade
→ Drift Rally, watch last 15min as dealers unwind hedges.
On big-picture structure, if JPM rolls to those strikes, their view is weak/sideways market in Q1.
