Gold was up about $22 per ounce on Friday (1/25/19), the day after I sold the JUN19 $1550-strike CALL. That happens sometimes. A chorus of factors all share in this move: The government shutdown ended with stopgap coverage until FEB 8th, the stock market appeared to improve. Most think of the shutdown as “over” rather than being just temporarily over. The $US Dollar took a big one-day hit, the $DXY ($US Dollar index) closed 95.813 -.788. This influence had more to do with gold going up than other factors, although they are all linked together in many ways. My short gold JUN19 1550 CALL didn’t move enough to spook me, and I’ll put the chart up here (below) to remind me just how far OTM my strike is:
My short APR19 Gold 1600-strike CALL is now trading at only 0.20 ($20). I will consider closing it out today and taking that profit, albeit a small one. IF/when I do this, I will take a look at a more distant (farther out) CALL to place along with the short JUN19 1550 strike. I don’t even pretend to predict any day-to-day movements of gold’s price, I keep the bigger picture in mind and my strikes as far OTM as I can.
I would call your attention to the movement in grain prices on Friday. As I often mention, grain prices rise and fall inversely to the $US dollar because a weaker $US dollar creates cheaper grain prices for foreign buyers. These day-to-day and week-to-week fluctuations from this inverse correlation are not predictable enough to rely on, still it pays to be aware in understanding how such things do play on each other.
Traders who come to the strategies used in Time Farming from a stock-trader’s perspective, often notice the adjustment to trading based on ‘where prices are not likely to go’ instead of the methods using price direction and amplitude used in equity trading.
Crude: I still have a GTC (good until canceled) order in to close out my short APR19 70-strike CALL at 0.04. I don’t see anything ‘new’ about crude ranging right now. I have in my thinking, as I stated prior, that those prices will likely stay in a range of $48 to $58, for a while – long enough to let all my crude positions mature. I am already looking out again to JUN19 and farther out, so I can study the option premiums available.
More Trade Commentary
Link for Seasonal Commodity Price Chart book on Amazon at HERE.
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
28 January 2019: Monday – Trade Commentary
Gold was up about $22 per ounce on Friday (1/25/19), the day after I sold the JUN19 $1550-strike CALL. That happens sometimes. A chorus of factors all share in this move: The government shutdown ended with stopgap coverage until FEB 8th, the stock market appeared to improve. Most think of the shutdown as “over” rather than being just temporarily over. The $US Dollar took a big one-day hit, the $DXY ($US Dollar index) closed 95.813 -.788. This influence had more to do with gold going up than other factors, although they are all linked together in many ways. My short gold JUN19 1550 CALL didn’t move enough to spook me, and I’ll put the chart up here (below) to remind me just how far OTM my strike is:
My short APR19 Gold 1600-strike CALL is now trading at only 0.20 ($20). I will consider closing it out today and taking that profit, albeit a small one. IF/when I do this, I will take a look at a more distant (farther out) CALL to place along with the short JUN19 1550 strike. I don’t even pretend to predict any day-to-day movements of gold’s price, I keep the bigger picture in mind and my strikes as far OTM as I can.
I would call your attention to the movement in grain prices on Friday. As I often mention, grain prices rise and fall inversely to the $US dollar because a weaker $US dollar creates cheaper grain prices for foreign buyers. These day-to-day and week-to-week fluctuations from this inverse correlation are not predictable enough to rely on, still it pays to be aware in understanding how such things do play on each other.
Crude: I still have a GTC (good until canceled) order in to close out my short APR19 70-strike CALL at 0.04. I don’t see anything ‘new’ about crude ranging right now. I have in my thinking, as I stated prior, that those prices will likely stay in a range of $48 to $58, for a while – long enough to let all my crude positions mature. I am already looking out again to JUN19 and farther out, so I can study the option premiums available.
More Trade Commentary
Link for Seasonal Commodity Price Chart book on Amazon at HERE.
Articles on my blog at: https://SellingCommodityOptions.com
You comments and question may be sent to: Don@WriteThisDown.com
Thank you – Don
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.