Closing Purchase today:I closed out my short DEC19 Corn 330-strike PUTs today for 1.375. I had sold them for 2.00, so there is a very small profit here of 2.0-1.375 = .625 X $50 = +$31.25 (excl. comm.)
Short the DEC19 Corn 330 for 2.0 cents ($100.) Position now closed.
Though these 330 PUTs are very far OTM, the risk-reward for holding them now is not there at all. So I’m clearing them out now and moving on. The seasonal price pattern for DEC19 will be DOWN after we get past this price run up on late planting. Now, I’m shopping to sell CALLs as far up as possible.
New Trade Today: Gold DEC19 Short Strangle: Selling the 1150 PUT and the 1700 CALL for 1.9 ($190). Initial net margin: $604. Expiration: November 25, 2019 (174 day until expiry.) Potential ROI*: 31.4% Prob. OTM: 98%. I got 1.40 ($140) for the 1700C and .50 ($50) for the 1150P.
Here’s the chart:
Comment: Some traders might opt to cut it closer but I like the 1700C/1150P. These options expire very near the USA holiday Thanksgiving, the last week of NOV 2019. I continue to hold my Gold SEP19 short 1500-strike CALL but watching it closely.
I really want to sell those DEC19 Corn CALLs, but so far, I’ve decided to wait until AFTER next Tuesday’s (corrected) WASDE report on the JUN19 report, out at Noon Eastern time on 11th June 2019.
Important: I mentioned in a recent comment about how the USDA reports facts and it is left up to analysts to come up with scenarios about what could happen. Dan O’Brien of Kansas State University has done exactly that. There is no doubt that the corn crop will be reduced acreage and reduced yield, the question remains how much, and how does that effect prices. Mr. O’Brien has four scenarios in his latest newsletter, see video below and download the report here: https://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter/us-corn-market-outlook-late-may-2019
DEC19 short strangle 30 PUT and 90 CALL for .30 ($300) I got 0.20 ($200) for the DEC19 30 PUT, and sold the DEC19 90 CALL for 0.10 ($100)
New Trade Today: Gold DEC19 Short Strangle: Selling the 1150 PUT and the 1700 CALL for 1.9 ($190). Initial net margin: $604. Expiration: November 25, 2019 (174 day until expiry.) Potential ROI*: 31.4% Prob. OTM: 98%. I got 1.40 ($140) for the 1700C and .50 ($50) for the 1150P.
Just so you know: A web-TV show with weekday morning ag summary (grains.) There is a free APP for iOs and Android for the Farm TV Journal. You can download at your app store.
Don A. Singletary
The commentary and examples are for teaching purposes only and are not intended to be a trading or trade advisory service. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein on the web site and/or newsletter, are committed at your own risk, financial or otherwise. Trading with leverage could lead to greater loss than your initial deposit. Trade at your own risk. Investors and traders are responsible for their own investment/trading decisions including entries, exits, position, sizing and use of stops or lack thereof. This is not a trade advisory service and is for educational purposes only. The content on the pages here is believed to be reliable - but we cannot guarantee it.
Don A. Singletary is a teacher and writer. For 25 years he was a commodity risk management (hedge) consultant for major corporations. He is the author of Option Income Training Bulletin, the only such publication dedicated to teaching small/medium personal investors how to sell commodity options for a second income, a strategy traditionally used mostly by professional investors, the wealthy, and money managers.
While this website is for subscribers only, you can get full access with a free trial subscription. Also you may visit his blog with many trade examples and articles on this valuable strategy at: SellingCommodityOptions.com
Greetings:
Closing Purchase today: I closed out my short DEC19 Corn 330-strike PUTs today for 1.375. I had sold them for 2.00, so there is a very small profit here of 2.0-1.375 = .625 X $50 = +$31.25 (excl. comm.)
Short the DEC19 Corn 330 for 2.0 cents ($100.) Position now closed.
Though these 330 PUTs are very far OTM, the risk-reward for holding them now is not there at all. So I’m clearing them out now and moving on. The seasonal price pattern for DEC19 will be DOWN after we get past this price run up on late planting. Now, I’m shopping to sell CALLs as far up as possible.
Quantity 1 each: $31.25
Quantity 5 each: $156.25
Quantity 10 each: $312.25
(excl comm.)
New Trade Today: Gold DEC19 Short Strangle: Selling the 1150 PUT and the 1700 CALL for 1.9 ($190). Initial net margin: $604. Expiration: November 25, 2019 (174 day until expiry.) Potential ROI*: 31.4% Prob. OTM: 98%. I got 1.40 ($140) for the 1700C and .50 ($50) for the 1150P.
Here’s the chart:
Comment: Some traders might opt to cut it closer but I like the 1700C/1150P. These options expire very near the USA holiday Thanksgiving, the last week of NOV 2019. I continue to hold my Gold SEP19 short 1500-strike CALL but watching it closely.
I really want to sell those DEC19 Corn CALLs, but so far, I’ve decided to wait until AFTER next Tuesday’s (corrected) WASDE report on the JUN19 report, out at Noon Eastern time on 11th June 2019.
Important: I mentioned in a recent comment about how the USDA reports facts and it is left up to analysts to come up with scenarios about what could happen. Dan O’Brien of Kansas State University has done exactly that. There is no doubt that the corn crop will be reduced acreage and reduced yield, the question remains how much, and how does that effect prices. Mr. O’Brien has four scenarios in his latest newsletter, see video below and download the report here: https://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter/us-corn-market-outlook-late-may-2019
KSU O’Brien report download link: https://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter/us-corn-market-outlook-late-may-2019
Summary of my Positions 04 JUNE 2019:
Short SEP19 Gold 1500 CALL for 0.70
DEC19 short strangle 30 PUT and 90 CALL for .30 ($300) I got 0.20 ($200) for the DEC19 30 PUT, and sold the DEC19 90 CALL for 0.10 ($100)
New Trade Today: Gold DEC19 Short Strangle: Selling the 1150 PUT and the 1700 CALL for 1.9 ($190). Initial net margin: $604. Expiration: November 25, 2019 (174 day until expiry.) Potential ROI*: 31.4% Prob. OTM: 98%. I got 1.40 ($140) for the 1700C and .50 ($50) for the 1150P.
Just so you know: A web-TV show with weekday morning ag summary (grains.) There is a free APP for iOs and Android for the Farm TV Journal. You can download at your app store.
Don A. Singletary
The commentary and examples are for teaching purposes only and are not intended to be a trading or trade advisory service. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein on the web site and/or newsletter, are committed at your own risk, financial or otherwise. Trading with leverage could lead to greater loss than your initial deposit. Trade at your own risk. Investors and traders are responsible for their own investment/trading decisions including entries, exits, position, sizing and use of stops or lack thereof. This is not a trade advisory service and is for educational purposes only. The content on the pages here is believed to be reliable - but we cannot guarantee it.