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Sold a small lot of SBF C22, and intend to add to this position at higher prices, if given the opportunity.
COT data, seasonals, and S&D data suggest lower prices for some weeks. In spite of the move lower of the US$ on Thursday / Friday sugar did not close upwards for these two days.
Fundamentals look positive (US corn is cheaper than corn from competing nations, South Americas are tight corn, high temperatures in the US might cause stress).
I remember you sold ES puts with approx. 100 DTE. Your current position is 136 DTE. Did you find out that the options with more DTE are generally more profitable ? Or is it a case to case decision ?
Rolled the LCV P100 to a smaller number of LCV P106. I prefer to have a smaller number of naked short options to be better prepared in case of a "black swan".
The Dec spread could make 4.1% monthly ROI if premium drops 50% in 30 days using 6X margin factor. The Nov 1750-1525 spread, which is about the same delta, would make 3.2%. Nov is 0.60 less premium while IM is only 10 less.
The question is will Dec drop by 50% in the same amount of time as Nov. That doesn't always happen. Further out DTE options usually have slower premium drop. But not always enough to make ROI lower.
Entering a spread the day the month before the quarterly starts trading, May and June spreads hit 50% drop on the same day 2/17/16 and Jun had a 0.8% higher ROI. The Aug spread hit 50% way before Sep did.
On 1/19/16 the BV was 21.4 for the May & June spreads. On 4/19/16 the BV was 14.0. So maybe when higher BV the better chance of the further DTE spread of dropping as quickly as the month prior. I don't know for sure just theorizing.
There is a ton more volume and OI for Dec over Nov. Dec contracts for almost any commodity will do that.
Note, you can only go that far out in time with the quarterly options. Nov started trading at 123 DTE.
