10 July 2019 WEDNESDAY newsletter

Greetings:  Trades today  10 July 2019 Wednesday

The GTC Order I put in Monday has been filled:  I bought back the DEC19 $1150-strike PUT I sold at 0.50.  My GTC order to buy it back at 0.20 ($20) was filled.  So a small profit of $30 per option was made.  You may recall this was originally one leg of a short strangle.

This morning, I also closed my short $40 PUT DEC19 Crude Oil for 0.31 ($310).  I made a closing purchase this morning at 0.20 ($200) for a profit on each option of $110.

New Trade Origination today:  I sold a Gold NOV19 1800-strike CALL (correction, this morning I said PUT, but it’s a CALL..thanks Mark.)  this morning for 1.10 ($110).  It has a Prob. OTM (probability of expiring worthless) of 98.25% and it expires in 110 days on October 17, 2019.  The initial net margin deposit was about $685.

(later note: it HAS gone up since I sold it. Wed. morning)


CommentsCrude Oil: With the tropical depression brewing the Gulf Coast and it being 90% chance of being upgraded to a Tropical Storm soon, oil, natural gas prices are UP today.  The DEC19 futures at 11:23 AM Eastern time were trading $59.30, +1.59.  This is common when this type of weather is in the Gulf, so I chose to take some profits on that DEC19 Crude Oil $40-strike PUT I sold on 27 JUNE 2019.  My plan, is that when/if the weather dissipates and prices come back down  is to SELL another PUT. Since I have the short DEC19 Crude 90-strike, there won’t be additional margin required to do that (one of the great advantages of the short strangle strategy.)

Gold Option: The IV% (implied volatility) of these options is very high, which makes them more costly, a ‘good thing’ for an option-seller.  Important Operating Note:  Please notice this option is in the NOV19 class, NOT DEC19.  The underlying for this NOV19 option is the DEC19 futures.  To be clear: I am saying the NOV19 is based on the trading price of the DEC19 Futures contract.  It is common to have option classes dated earlier than the underlying futures.  The NOV19 class expires 27 October 2019.  I was a little surprised to find this strike so expensive in the NOV19 class. (my opinion of course.)  I want to sell either NOV19 or DEC19 PUTs, but since Gold is up today about $9.00, I will wait on this.

I just posted charts on both Crude Oil and Gold only two days ago, so I won’t put up new charts in this posting.  Those charts on in Monday’s post at: https://www.timefarming.com/blog/08z-july-2019z/ 

Corn: Tomorrow (THUR 7/11/2019) the USDA’s WASDE report will be issued at 12:00 noon NY Time (Eastern zone USA. the link is below.)  Most traders consider it bearish because the revised acreage (expect to be down) will not be in the WASDE until the August 12th monthly report.  Estimate for the yield averages about 164.8, last months WASDE was about 166 bushels per acre.  To be clear:  With little change in the yield expected and the knowledge that revised planted acres won’t be in until the next WASDE in August, price could just drift down from present levels.  You may recall, as I previously noted, the USDA is taking a special survey on acres planted; it is THOSE results that won’t be out until the August report.

It is likely the Ag TV report in the morning will comment on this, but I don’t expect anything new to come out.  The link is here: https://www.agweb.com/agday/

The WASDE tomorrow at Noon Eastern can be viewed here: https://www.usda.gov/oce/commodity/wasde/  This link and many others are in the LINKS – RESOURCE LIBRARY tab on this website.  WASDE is one you should bookmark in your browser.

Summary of my Positions 10 July 2019:

  DEC19  Crude Oil short  90 CALL for .10 ($100)     

And the Gold NOV19 1800-strike CALL I sold today for $110

That is all today.  If the weather drives up Crude more later this week, I could be shopping option classes in early calendar 2020 for CALLS to sell.  Thank you. – Don

Here are the published commission rates at TastyWorks (same people that created ThinkOrSwim) for Futures and Options on Futures.  They trade all the exchanges I use here but not ICE listings (softs) or CME meats.  The software very easy-to-use and learn with the “see it, click it, trade it” features.  If you also trade STOCKS AND STOCK OPTIONS, the rates for those are  $5.00 stocks round trip and $1.00 stock options round trip (plus exchange fees.)

There’s a video review of TastyWorks  software at the bottom of this page.  NOTE: the option analyze feature (and it is very nice) only works  on STOCK options and not options on Futures.  It analyzed covered calls, short puts, and advanced spread strategies for stocks.  Accnt minimum is $2000 and they offer SPAN Minimum margins on all trades and the low rates quoted here are for ALL customers regardless of trade volume.

Here is my affiliate link is you want more info on them:  https://start.tastyworks.com/#/login?referralCode=KXHXYPPZ9R
I would appreciate you using this link if you want more info.  Thank you.

Probably not necessary for most subscribers here, but if you want to see a quick 3 minute video that feature their one-page “see it, click it, trade it software), here it is.  It’s pretty neat actually.   Thank and good trading to all this week.  Thank you  – Don


Affiliate Link HERE or: https://start.tastyworks.com/#/login?referralCode=KXHXYPPZ9R

Don A. Singletary

FYI:  I am often asked by new readers about some idea of the number of options and account size.  Be advised, I only offer this for discussion and reference.   This is not a trade advisory service. See disclaimer in graphic.

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