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.
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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