I sold Crude Oil FEB20 short strangle, the 80 CALL and 35 PUT for 0.33 ($330) this morning. (.15 for 80C and .18 for 35P) Initial Margin: $930 Underlying: FEB20 Crude Oil: $54.53 (/CLG20) Potential ROI: 35.4% (based on initial margin requirement) Days Until Expiration: 107 Expiration Date: 15 JAN 2020 Prob. of expiring OTM: 35P = 95% and 80C = 98%
Comments: Crude supplies are plentiful and global demand steady but could weaken over the next few weeks. Hard to think that the expiration date for these options is only 107 days away on January 15, 2020.
New Trade: Gold: FEB20 gold is trading $1483 this morning. Prices have fallen from the $1570 area. I sold the FEB20 1900-strike CALL for 1.9 ($190).
Initial Margin Required: $1350
Prob of exp OTM: 98% Expiration: 28 JAN 2020 (120 days)
Potential ROI: (base on initial margin) 190/1350 = ~ 14%
Comment: Gold has fallen $88/ounce since the first week of September. If stocks continue to climb or range trade a while, the gold could fall more. I choose the 1900-strike CALL to sell because is has good open interest and far enough out-of-the-money with enough premium to make the trade worth it. When / if gold falls even more, I will consider shorting a PUT in the same class (FEB20) to form a short strangle.
As of today, I hold these two new positions, plus this trade: Short DEC19 short 420-strike CALLs, see:
I still want to sell DEC19 Corn PUTs again, but feel prices are soft and could go down more soon. I’m aside until more info is available in the OCTOBER 2019 USDA/ WASDE report.
That is all today have a great week. If you are a trial subscriber, please click the link below (or HERE) to subscribe. Your remaining trial time will be added to your subscription time. And check out a few training videos at our tab: Video Training Library. Thank you. – Don
Don A. Singletary
Trial Subscribers: Subscribe today and don’t miss an issue. Thank you.
Trial Subscribers: Don’t miss an issue.
When new subscribers ask me to recommend a broker that has very easy-to-learn and easy-to-use software (free of course) and a good commission rate, I recommend TastyWorks. I have some of my personal accounts there. They also have a low 85 cents commission rate on the new Micro Index Futures; this is only $2.42 INCLUDING ALL FEES / ROUND TRIP .
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.
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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: 30 September 2019, MONDAY
Two New Trades today:
I sold Crude Oil FEB20 short strangle, the 80 CALL and 35 PUT for 0.33 ($330) this morning. (.15 for 80C and .18 for 35P)
Initial Margin: $930
Underlying: FEB20 Crude Oil: $54.53 (/CLG20)
Potential ROI: 35.4% (based on initial margin requirement)
Days Until Expiration: 107
Expiration Date: 15 JAN 2020
Prob. of expiring OTM: 35P = 95% and 80C = 98%
Comments: Crude supplies are plentiful and global demand steady but could weaken over the next few weeks. Hard to think that the expiration date for these options is only 107 days away on January 15, 2020.
New Trade: Gold: FEB20 gold is trading $1483 this morning. Prices have fallen from the $1570 area. I sold the FEB20 1900-strike CALL for 1.9 ($190).
Initial Margin Required: $1350
Prob of exp OTM: 98%
Expiration: 28 JAN 2020 (120 days)
Potential ROI: (base on initial margin) 190/1350 = ~ 14%
Comment: Gold has fallen $88/ounce since the first week of September. If stocks continue to climb or range trade a while, the gold could fall more. I choose the 1900-strike CALL to sell because is has good open interest and far enough out-of-the-money with enough premium to make the trade worth it. When / if gold falls even more, I will consider shorting a PUT in the same class (FEB20) to form a short strangle.
As of today, I hold these two new positions, plus this trade:
Short DEC19 short 420-strike CALLs, see:
I still want to sell DEC19 Corn PUTs again, but feel prices are soft and could go down more soon. I’m aside until more info is available in the OCTOBER 2019 USDA/ WASDE report.
You can download an updated Options Expiration Dates (selected futures) 2020 at this link: https://sellingcommodityoptions.com/SFOE.pdf
That is all today have a great week. If you are a trial subscriber, please click the link below (or HERE) to subscribe. Your remaining trial time will be added to your subscription time. And check out a few training videos at our tab: Video Training Library. Thank you. – Don
Don A. Singletary
When new subscribers ask me to recommend a broker that has very easy-to-learn and easy-to-use software (free of course) and a good commission rate, I recommend TastyWorks. I have some of my personal accounts there. They also have a low 85 cents commission rate on the new Micro Index Futures; this is only $2.42 INCLUDING ALL FEES / ROUND TRIP .
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.
***************
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.