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Have been watching the hog market with some interest. It has been going up for a time.
Cash is bout 75
July an August bout 81
Then October drops down to 68
My thoughts are to sell some calls at some point. I can't find enough fundamentals to support my thoughts as yet, then the technicals confuse me with the drop from August to October prices.
Anyone got thoughts on this?
LH Oct is pricing something different than Aug. Same like winter NG is higher than spring or fall NG. Or July soybeans is old crop and Nov beans is new crop.
I would add that if you're a beginner, there are better products to trade. Hogs have a pronounced seasonal production cycle (noted above); they are cash settled against an index; they can whip around based on slaughter capacity or the way bellies, loins, hams, etc interact to form the overall carcass value (and thus the cash index); the May contract should be avoided. That's in addition to "regular stuff" like trade policy, disease concerns, dollar value, fund flows, feed costs and competing proteins.
In other words, if you're going to trade livestock fundamentally, be prepared for a long education. Maybe you can trade them price action/T.A. one expiration at a time, but make sure you look at history for a lot of years. When they trend, they can go very far, very fast.
I do not like holding short calls in soybeans at this time of the year. It is a weather market. In case of eg. flooding in soybeans areas, prices will move upwards dramatically.
I still wait for higher prices to sell wheat calls, but this trade might move on without me.
I also hold some LEQ puts, but the LEQ P106 as a strangle with the LEQ C140.
I do not hold a position in CL, RB, and HO, but I intend to sell CL calls at higher prices if given the chance. I do not intend to sell puts.
Yea myrrdin
I am having thoughts about exiting wheat an beans. The wheat I entered in late March. The beans I entered late April.
They are both at 50% profit or better. Just trying to decide if I should take profit. I normally would but since I don't have time to research for new investments I'm thinking of letting time erosion work for me.
I'd very much like others thoughts on this.
Hi to all!
What do you think about short-dated options? (e.g. ZCED - corn)
Can there be any interesting constructions with weekly-classic-short dated?
Anyone got thoughts on this?
p.s. sorry my eng not so well.
br, mdsay
I often sell short-dated options. At this time of the year I am interested in options based on the November (soybeans) or December (corn) contracts, and ending in June or July. They move less volatile than the July or August contracts. Disadvantage: The fills are worse than options for the July or August contracts.
I rarely trade the weekly options. I only use them as a protection in case of a report.
