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Grains & Beans
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Created: by myrrdin Attachments:0

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Grains & Beans

  #91 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,585 since Nov 2014
Thanks: 1,959 given, 2,108 received

I currently hold the following positions in grains & beans:

Long CK9-CZ9
Short CH9 P3.7

The USDA report on corn yesterday was bearish, but sales look strong for the foreseeable future.

In Brazil and Argentina they will replace some corn acres and plant soybeans, as the price for soybeans there is very lucrative.this will suppport the May contract.

Seasonals and COT data are in favor of these trades.

Depending on weather in South America, the price of corn will move up slightly or strongly in my opinion. Thus, I split my position in the futures spread and short options.

Best regards, Myrrdin

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  #92 (permalink)
Cape Town South Africa
 
Trading Experience: Intermediate
Platform: Zaner 360, RCG Onyx Plus
Broker/Data: DeCarley
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Kruger's Avatar
 
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Corn Spread


myrrdin View Post
I currently hold the following positions in grains & beans:

Long CK9-CZ9
Short CH9 P3.7

The USDA report on corn yesterday was bearish, but sales look strong for the foreseeable future.

In Brazil and Argentina they will replace some corn acres and plant soybeans, as the price for soybeans there is very lucrative.this will suppport the May contract.

Seasonals and COT data are in favor of these trades.

Depending on weather in South America, the price of corn will move up slightly or strongly in my opinion. Thus, I split my position in the futures spread and short options.

Best regards, Myrrdin

Just checking if your spread is short CZ9 or CZ8?

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  #93 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,585 since Nov 2014
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Kruger View Post
Just checking if your spread is short CZ9 or CZ8?

It is short CZ9, as mentioned above. It reflects my opinion that corn price will rise moderately until March for the reasons described below.

Best regards, Myrrdin

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  #94 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,585 since Nov 2014
Thanks: 1,959 given, 2,108 received

I currently hold the following positions in grains & beans:

Long CK9-CZ9
Short CH9 P3.8

The USDA report of last week was bullish for corn, and sales for corn look strong for the foreseeable future.

In Brazil and Argentina they will replace some corn acres and plant soybeans, as the price for soybeans there is very lucrative. This will suppport the May contract.

Seasonals and COT data are in favor of these trades.

Depending on weather in South America, the price of corn will move up slightly or strongly in my opinion. Thus, I split my position in the futures spread and short options.

Additionally I hold the KWH-WH (seasonal trade), WZ-WN spreads and short WH P4.90 options (bullish USDA report, weather issues in Australia, Argentine, and Russia).

Best regards, Myrrdin

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  #95 (permalink)
London, UK
 
 
Posts: 74 since Jan 2018
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Soymeal collar trade

The idea of this trade came from watching a broker webinar 3 days ago. I would love critique and feedback.

On 31-Oct, I opened a soymeal collar:

Long Future : Mar '19 at 306.9
Long Put (270 strike) : Mar '19 at -1.35 (debit)
Short Call (320 strike) : Mar '19 at 8.5 (credit)

I make the max possible loss to be = diff between future and put strike + price paid for put - credit from short call
= (306.9- 270)*100 + (1.35*100) - (8.5*100)
= $2,983 (includes comms) per contract.

I will base the % return on the max possible loss and not on the margin (which is lower).

Magically, yesterday, the underlying rose 10 points and at one stage was at 318. The combo was making around $800 profit. On opening, my plan was to try and close if the future hits 320, since after that the gains are limited by the short call. However, even after that point, since the delta of the calls is around 0.5 and that of the future is 1, then further rises in the underlying will still be profitable, so I'm holding for now.

So for those more experienced in futures collars, my questions are :

1) Do you sometimes just open the future + put, and wait for a bounce before selling the short call?
2) Is there is a guideline for picking the put/call strikes? (I may pick a zero cost collar next time for example, if I'm more bullish about the underlying)
3) Do you sometimes use closer months for the call expiry, with the view that it will expire worthless and you can
then sell more calls for the following month, and the next etc? Thereby increasing the total credit received.
4) I didn't take into account finer details like volatilities etc - any recommendations?

Would love feedback.


Last edited by zxcv64; November 2nd, 2018 at 05:59 AM.
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  #96 (permalink)
Market Wizard
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zxcv64 View Post
The idea of this trade came from watching a broker webinar 3 days ago. I would love critique and feedback.

On 31-Oct, I opened a soymeal collar:

Long Future : Mar '19 at 306.9
Long Put (270 strike) : Mar '19 at -1.35 (debit)
Short Call (320 strike) : Mar '19 at 8.5 (credit)

I make the max possible loss to be = diff between future and put strike + price paid for put - credit from short call
= (306.9- 270)*100 + (1.35*100) - (8.5*100)
= $2,983 (includes comms) per contract.

I will base the % return on the max possible loss and not on the margin (which is lower).

Magically, yesterday, the underlying rose 10 points and at one stage was at 318. The combo was making around $800 profit. On opening, my plan was to try and close if the future hits 320, since after that the gains are limited by the short call. However, even after that point, since the delta of the calls is around 0.5 and that of the future is 1, then further rises in the underlying will still be profitable, so I'm holding for now.

So for those more experienced in futures collars, my questions are :

1) Do you sometimes just open the future + put, and wait for a bounce before selling the short call?
2) Is there is a guideline for picking the put/call strikes? (I may pick a zero cost collar next time for example, if I'm more bullish about the underlying)
3) Do you sometimes use closer months for the call expiry, with the view that it will expire worthless and you can
then sell more calls for the following month, and the next etc? Thereby increasing the total credit received.
4) I didn't take into account finer details like volatilities etc - any recommendations?

Would love feedback.

1) No, usually not. I am not good in foreseeing the short-time moves of the price.
2) I usually choose zero cost collars.
3) No, usually the strike price is too close to the current price or the profit of the call is too low.
4) There are a lot of things to take into account regarding fundamentals. But this is an own topic.

Best regards, Myrrdin

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  #97 (permalink)
Legendary Market Wizard
Houston, TX
 
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Posts: 3,129 since Dec 2013
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@zxcv64 don't forget that buying both a future and a put is the same as buying a call.
So long future with a collar has the same payoff as a long call spread, which is the same as a short put spread.
Long Fut + Long 270 Put + Short 320 Call ~ Long 270/320 Call Spread ~ Short 270/320 Put Spread.

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  #98 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
Platform: Zaner360, TWS, Vantage
Broker/Data: DeCarley, IAB, RJO
Favorite Futures: Commodities
 
Posts: 1,585 since Nov 2014
Thanks: 1,959 given, 2,108 received

I bought the KWN-WN end of last week for the following reasons:

The spread has not been at such a low level in February since 1984 (I do not have access to older data).

Delivery for the W contract can be made with KW. Thus, KW should not be much cheaper than W.

Question: I would understand that KW is some cents cheaper than W because of transport cost etc. But 20 c or more ? Can anybody here explain ?

Best regards, Myrrdin

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  #99 (permalink)
Market Wizard
Linz Austria
 
Trading Experience: Advanced
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Favorite Futures: Commodities
 
Posts: 1,585 since Nov 2014
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I was asked about my opinion regarding Soyoil in another thread, but answer it here to allow other traders to find it in a couple of weeks.

Honestly, I do not have a strong opinion on Soyoil. I do not hold a position, and I do not intend to enter a position in the next couple of weeks.

Seasonals suggest a move sidewards for the next couple of weeks.

COT data for Soybeans - I do not have charts for Soyoil - are bullish.

Supply & Demand for Soybeans to me looks bearish, but a lot will depend on how much China will buy. But I assume that a lot of buying from China is already priced.

There is no clear picture to suggest either buying or selling.

You intend trading the Soyoil contract because of its low margin. I would suggest to start spread trading as here margins are significantly lower. And you have a larger choice of trades with a very small account.

Currently the only interesting trade in the Soybean Complex to me seems to be the 5*CZ - 2*SX. I think about entering this spread in the near future.

Best regards, Myrrdin

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  #100 (permalink)
London
 
 
Posts: 146 since Apr 2018
Thanks: 165 given, 75 received



myrrdin View Post
I was asked about my opinion regarding Soyoil in another thread, but answer it here to allow other traders to find it in a couple of weeks.

Honestly, I do not have a strong opinion on Soyoil. I do not hold a position, and I do not intend to enter a position in the next couple of weeks.

Seasonals suggest a move sidewards for the next couple of weeks.

COT data for Soybeans - I do not have charts for Soyoil - are bullish.

Supply & Demand for Soybeans to me looks bearish, but a lot will depend on how much China will buy. But I assume that a lot of buying from China is already priced.

There is no clear picture to suggest either buying or selling.

You intend trading the Soyoil contract because of its low margin. I would suggest to start spread trading as here margins are significantly lower. And you have a larger choice of trades with a very small account.

Currently the only interesting trade in the Soybean Complex to me seems to be the 5*CZ - 2*SX. I think about entering this spread in the near future.

Best regards, Myrrdin

Thanks @myrrdin

What a great post, I'll need time to read and digest this especially the bit on spreads - not sure what these are?

Sent using the futures.io mobile app

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