New Trade this morning: Short Strangle Crude Oil FEB20. I shorted the 75-strike CALL and the 40 PUT for a total of $140. I got 0.06 for the 75 CALL, and got 0.08 for the 40 PUT, a total of 0.14 ($140).
The initial margin requirement was: $1100, the underlying FEB20 was trading at $57.04 per barrel. The Prob OTM at 97%.
Comment: No shortage of crude oil and it seems and no immediate threat to supply, the price may continue in the recent trading range.
Corn: The November WASDE report from USDA show corn ending stocks, yields, and usage with minor changes and the average to-farm price increased from $3.80 to $3.85 per bushel. There are reports of difficulties in drying stored corn due to propane shortages and wet weather, but so far – this has had little or no impact on prices. Any USA/Tariff agreements will affect soybeans much more than corn, still there is room for improvement in projected exports for 2020. The WASDE report NOV19 is at this link: https://www.usda.gov/oce/commodity/wasde/
My next Corn Trade will likely be selling PUTs on the MAR2020 Corn Futures. The pending trade talk agreements are supporting prices at this time, but as harvest progresses, I expect the MAR20 Corn futures to be lower than today’s price at 385. As the 15 year average chart (below) suggest lows come in OCT, I feel the trade talks have not yet allowed for a lower prices, basis the MAR20 futures. The DEC 2019 WASDE should help drive prices down more as a successful harvest is confirmed. Last year, the low’s for the MAR2018 Corn Futures hit a low of near 346 on December 17, 2018.
source of chart: Seasonal Commodity Charts – Designed by Mother Nature by Don Singletary (Amazon link)
Gold: I am shopping to sell a 2020 short strangle on Gold futures but with the stock market at an all-time high and politics still driving the headlines, the next major direction for stocks is a little too uncertain for now. I will be watching closely this week and next to see if volatility increases a bit and I’m still shopping for the short strangle and expect to find it soon.
That is all today have a great week. – Don
Trial Subscribers: Subscribe today and don’t miss an issue. Thank you.
If you have never day traded any futures contracts and guess it can be very tricky, you are correct. The new Micro E-mini contracts are 1/10th the size of the S&P500 E-mini and NASDAQ100 E-Mini and since the dollar amounts are much lower, so is the risk. So learning to day trade futures is more affordable than ever now. My most recent book is about learning to day trade using these much smaller (lower risk) contracts. $650 margins to trade and commissions usually under a dollar for day trading them.
Here’s the link to subscribe to the YouTube Channel: Day Trading Micro Futures for free videos:
I do a lot of my own trading with TastyWorks because I like the easy-to-use platform and they have lower commissions than most. The customer service is outstanding. I have an affiliate link and recommend them often for months now and I’ve never had any negative feedback. They also have excellent free mobile apps that are easy to use- and they have ACH free money transfers to-and-from you bank account (usually one day free service.) TastyWorks has just joined Schwab, ThinkOrSwim, and other brokers and introduced NO Commission stock trading.
TastyWorks: $2,000 minimum to open account. Easy online application, free ACH money transfers. Here’s my affiliate link forTASTYWORKS.International Accounts for 70 countries available. This link is my affiliate link.
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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: Wednesday 13 NOV 2019:
New Trade this morning: Short Strangle Crude Oil FEB20. I shorted the 75-strike CALL and the 40 PUT for a total of $140. I got 0.06 for the 75 CALL, and got 0.08 for the 40 PUT, a total of 0.14 ($140).
The initial margin requirement was: $1100, the underlying FEB20 was trading at $57.04 per barrel.
The Prob OTM at 97%.
Comment: No shortage of crude oil and it seems and no immediate threat to supply, the price may continue in the recent trading range.
Corn: The November WASDE report from USDA show corn ending stocks, yields, and usage with minor changes and the average to-farm price increased from $3.80 to $3.85 per bushel. There are reports of difficulties in drying stored corn due to propane shortages and wet weather, but so far – this has had little or no impact on prices. Any USA/Tariff agreements will affect soybeans much more than corn, still there is room for improvement in projected exports for 2020. The WASDE report NOV19 is at this link: https://www.usda.gov/oce/commodity/wasde/
My next Corn Trade will likely be selling PUTs on the MAR2020 Corn Futures. The pending trade talk agreements are supporting prices at this time, but as harvest progresses, I expect the MAR20 Corn futures to be lower than today’s price at 385. As the 15 year average chart (below) suggest lows come in OCT, I feel the trade talks have not yet allowed for a lower prices, basis the MAR20 futures. The DEC 2019 WASDE should help drive prices down more as a successful harvest is confirmed. Last year, the low’s for the MAR2018 Corn Futures hit a low of near 346 on December 17, 2018.
source of chart: Seasonal Commodity Charts – Designed by Mother Nature by Don Singletary (Amazon link)
Gold: I am shopping to sell a 2020 short strangle on Gold futures but with the stock market at an all-time high and politics still driving the headlines, the next major direction for stocks is a little too uncertain for now. I will be watching closely this week and next to see if volatility increases a bit and I’m still shopping for the short strangle and expect to find it soon.
That is all today have a great week. – Don
Trial Subscribers: Subscribe today and don’t miss an issue. Thank you.
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If you have never day traded any futures contracts and guess it can be very tricky, you are correct. The new Micro E-mini contracts are 1/10th the size of the S&P500 E-mini and NASDAQ100 E-Mini and since the dollar amounts are much lower, so is the risk. So learning to day trade futures is more affordable than ever now. My most recent book is about learning to day trade using these much smaller (lower risk) contracts. $650 margins to trade and commissions usually under a dollar for day trading them.
free prime shipping
Here’s the link to subscribe to the YouTube Channel: Day Trading Micro Futures for free videos:
I do a lot of my own trading with TastyWorks because I like the easy-to-use platform and they have lower commissions than most. The customer service is outstanding. I have an affiliate link and recommend them often for months now and I’ve never had any negative feedback. They also have excellent free mobile apps that are easy to use- and they have ACH free money transfers to-and-from you bank account (usually one day free service.) TastyWorks has just joined Schwab, ThinkOrSwim, and other brokers and introduced NO Commission stock trading.
TastyWorks: $2,000 minimum to open account. Easy online application, free ACH money transfers. Here’s my affiliate link for TASTYWORKS. International Accounts for 70 countries available. This link is my affiliate link.
***************
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.