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both fast and slow stochastics are above 80 on ZS (soybeans). This is what I look for when adding short delta in grains. I will look to sell 20 delta calls here, and then leg into a strangle when I can sell puts into weakness when we go below 20 on the stochs. DTE is usually 45 to 90 days. I usually don't trade future contracts unless I want to be directional like a covered call or covered short.
using the 20 delta options allows me some room in case I am early in my entry and grains move against my newly entered positions.
@Soycorn: Thanks for the post. Curious to know whether you consider RSI in the decision making process and/or Williams %R?
From fundamental perspective, I've tried to, in the past, evaluate grains/meats and have not been right, so curious to see how pure technicals have worked out for you in past trades?
@myrrdin & other experienced traders, I'd appreciate any insights from ya'll too! Thanks in advance
if you look back a few posts, I love RSI for Gold/Silver. Seems to work well. not perfect, but good. For grains, I am a part time farmer and raise corn/soybeans, so I tend to be heavier on my short delta as a way to offset my long physical bushels that I am growing. I tend to be more cautious when the growing season can offer some weather scares or around USDA reports. However, I try to stay small and sell options when premium is richer. Selling premium in anything has been challenging in the past months.
If I look back at the trades that have ended badly, it was usually when my size (number of contracts) simply got out of hand, and I took more heat than I was willing, and closed my trades. Otherwise, the probabilities are certainly in your favor if you sell far enough out of the money, AND use some sort of technical indicator to help optimize timing. I'm not trying to hit tops and bottoms, just trying to get extra padding on my positions by selling into strength and buying into weakness.
I currently do not hold short option positions in soybeans.
The main reason is that we are in a weather market in the South Americas. A change in the weather forecast could cause a strong move upwards for the soybeans price and a rise of volatility. in case weather remains favourable prices should come down substantially.
I had an account at OptionsXpress and received it. It is now Street Smart Central at Charles Schwab. I kept my account open there to keep getting Dow Jones for free. You need $50 minimum in account to not have fees.
Floyd Upperman's Report is only on COTdata, and, in this regard, goes far beyond what Dave Hightower offers. He explains COT data (also in his book), he has a lot of graphics regarding actual COT data, he has a concept how to enter trades, and he is open to answer questions. I subscribed to them years ago. But after a while I was able to do this work myself.
As far as I know Floyd has a free trial subscription.
