22 May 2019 WEDNESDAY newsletter issue

There will be no TRADE COMMENTARY on Monday, 27th MAY 2019 due to a holiday schedule.  The commentary will the following day on Tuesday 28th May next week.

Closing Trades and Orders today, 22 MAY 2019: (P/L does not include commissions.)
Illustrations are Quantity = one option

If you wish to see the newsletter post when each of these trades was placed, touch/click the Trade Origination Button.

Short Crude Oil JUL19 50 PUT     Sold at 0.15, I bought it back (closing purchase) today @ 0.04   Profit: 0.11 ($110)

Short Crude Oil JUL19 75 CALL   Sold at 0.11,  I bought it back (closing purchase) today @  0.03  Profit: 0.08 ($80)

Short Gold AUG19 1450 CALL      Sold at 1.00, I bought it back (closing purchase) today @  0.30  Profit: 0.70 ($70)

Short Gold SEP19 1160 PUT         Sold at 0.90, I bought it back (closing purchase) today @  0.40  Profit: 0.50 ($50)

Total  P/L on closing trades today*: (not including commissions)

Quantity   1 each: $310
Quantity   5 each: $1550
Quantity 10 each: $3100

*This is for illustration only.  Past results are never an indicator of future results.  Trading commodity options is risky and not suitable for all investors.

Summary of my Positions 22 May 2019:

Short SEP19 Crude Oil 80-strike CALL for 0.17

Short SEP19 Gold 1500 CALL for 0.70

Short the NOV19 Soybean 1200-strike CALLs for 2.125 cents.

Short the NOV19 Soybean 1100-strike CALLs for 3.0 cents

Short the DEC19 Corn 330  for 2.0 cents ($100.)    No GTC outstanding at this time.

Operations Note:  The United States of America holiday Memorial Day on Monday 27th May and the markets will be closed.  Due to this schedule, the TRADE COMMENTARY will be on Tuesday, 28th May next week instead of the usual Monday posting.

Comments for today WEDNESDAY   22MAY2019:

New Trade Considerations: I will likely hold my remaining five positions over the long weekend coming up.  After closing the positions today, I am actively shopping to sell more options in Crude and Gold very soon.  And of course, I am looking to sell some strikes on DEC19 Corn.  President Trump is scheduled to visit an ethanol refinery in Iowa in a week or two and will pledge to permit year-round sales of high-ethanol E15 blend.  For over a year now, this has been in the works to raise the allowable ethanol content of United States of America gasoline from 10% to 15%.   This transition will be over time and obviously means more Corn will be used to produce ethanol.  This will be no surprise to the corn futures market but still depending on the details of the increase, there is potential an impact on Corn prices.  The USA produces about 15 Billion bushels of Corn per year and currently uses about one-third (5 billion bushels) for ethanol production.  The E15 will impact demand for crude oil of course over time; so this can’t be bullish for Crude but the price impact is more likely to be over time rather than sudden.   

The more urgent news on Corn today, is the speculation that the ‘yield drag’ (reduction of yield) could go as low as 167 bushels per acre (was 176 estimate by USDA) and that a loss of planted acres of  4 to 7 million acres of of corn is possible.  Growers of corn will no doubt love to see headlines in reports about this, as it could boost corn prices even higher.  These numbers are currently a speculation not fact.  I’ll comment more in the next Trade Commentary post on Tuesday.  I expect we’ll see lots of articles about these topics very soon.  For that reason, I will delay my selling DEC19 Corn CALL options until at least next week and will be following the market closely.  This is a follow-up from yesterday’s post about Corn, see:  21May19

Usually the Friday prior to the Memorial Day holiday weekend is light trading in most markets.  I wish everyone a safe and enjoyable weekend wherever you are – all the best – Don

Don A. Singletary


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