10 December 2019 TRADE COMMENTARY / newsletter

Greetings: Tuesday 10th December 2019:

My GTC order to close out my Crude Oil short strangle was filled at 0.05.  I shorted the 75-strike CALL and the 40 PUT for a total of $140 back on 13th November, and it was closed out at 0.05 for a profit of $90 per strangle.


NEW TRADE TODAY:  I sold a MARCH 2020 CRUDE OIL short strangle this  morning.  I sold the 70 Calls and the 45 Puts @ 0.14  for each of then, total of 0.28  ($280.)
Init. Margin: $1650
Prob OTM: 95% (at expiration)
Expiration: 14 FEB 2020
Potential return: (assumes no drawdown, theoretical) 16.9% (not incl comm.)

NEW TRADE TODAY: I sold a MARCH 2020 Gold 1350-strike PUT for 0.80 ($80) today.
Init. Margin = $1713
Expiration: 77 days on 25th of FEB 2020
The underlying is the APRIL20 Gold Futures
Prob OTM: 96%

Comment: With the Stock Market at all time highs, there could be some consolidation and/or downturn; this event would drive gold prices UP, and then I intend to sell a call at around $1700 or better.  I feel it is too risky to sell the 1700 CALL at this time, so I will try to ‘leg in’ to a short strangle if the opportunity arrives.  I like the short strangles since they only require ONE margin and that delivers more “bang for the buck” so-to-speak.

So two new positions today.  That is all my trades today.

Comment:  CORN
Today at NOON Eastern Time the WASDE (world supply-demand estimates) report will be posted.  I expect that it will show a lower yield by either/or  a lower per acre yield and a reduction in harvest acres.   Here’s the link for the report at Noon today: https://www.usda.gov/oce/commodity/wasde/

Here is a copy of this week’s Crop Progress (below):  You can see that with both last year and the 5-year average harvest at this time of year at 100%, the report this week only shows 92% harvested.   The WASDE today may confirm some yield reduction.  I want to sell some MAR2020 Corn PUTS, but will wait to see the report today and then what happens to prices.

That is all today.  Thank you. -Don

Don A. Singletary

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