The thread seemed to have died out but I see a recent flurry of activity which is nice.
Another thought I had on the management side would be to scale in with futures contract(s) when one strike is being approached. I know many say this is risky as the market could reverse the moment after you enter (that's trading) but if you have sold multiple options and one leg is coming under pressure then this could be an alternative which could keep the trade open till expiry rather than closing out in a panic and taking a definate loss.
The following user says Thank You to britkid99 for this post:
I recently received the latest email from Mr Cordier with regard to selling Dec Corn Calls.
He is suggesting corn is at or near its peak and to sell calls above 960 (20% OTM) whilst the options are hot from recent volatility.
I have enclosed a chart of December Corn ZW showing the latest delta volume picture.
You can see the sellers from the highs at 848 have have now covered their shorts along with a little fresh buying from the 785 level.
To me this says there are no more sellers left to cover and push prices higher. It will take fresh new buyers to come in to the market to do that. This tends to support what Mr Cordier says at least for the moment.
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I note I seem to have dropped off their monthly prospective customer list, which is a shame as it at least gave some ideas as to where to look and when.
Here's a link to Cordier's corn article. Dec Corn futures prices are up 45 cents since he wrote the article. Link
The delta on the Dec 960 calls is up to .2465. No way I touch that with a 10 foot pole. Far too risky. The price of that option has gone UP 50% since he wrote the article.
He says the grain yields are already built in. I disagree because with a drought the yields vary so much by area that it makes it very hard to accurately predict total yields in the US. The crop tours are getting lower numbers than expected. Now we also have drought reducing yields of grains in Russia.
Grains this year are just too volatile. Some times you just need to totally avoid some commodities until they calm down.
The following user says Thank You to ron99 for this post: