Yes, that is correct. To give an update on my HE short 67-64 put spread, I experienced the expected max loss on the position. It was a good learning experience on meats and how volatile things can get very quickly.


I am currently short the following spreads :

NG - short Sep call spread, 3.0-3.1

LE - short Sep put spread, 112-110

ZW - short Oct call spread, 560-580

GC - short Dec put spread, 1180-1170. Opened yesterday and want to give this one plenty of time to recover. I have a
unhealthy relationship with GC - I don't quite understand it and it's fundamentals as yet. I want to get familiar with its behaviour and the best way for me is to have some skin in the game. Thus, I opened this trade (with a small allocation) even though it is not a screaming one.


On my short spreads, I'm intentionally selling close to the money, but in smaller quantities, rather than selling larger quantities of lower delta, further OTM. This suits my trading style better.

Regards

GC - short Dec put spread, 1180-1170. Opened yesterday and want to give this one plenty of time to recover. I have a unhealthy relationship with GC - I don't quite understand it and it's fundamentals as yet. I want to get familiar with its behaviour and the best way for me is to have some skin in the game. Thus, I opened this trade (with a small allocation) even though it is not a screaming one.

I hold the short NGX C3. This trade should be supported by seasonals and by El Nino. The probability of this phenomenon in fall / winter has been increased to 70 % recently.

Yes, that is correct. To give an update on my HE short 67-64 put spread, I experienced the expected max loss on the position. It was a good learning experience on meats and how volatile things can get very quickly.


I am currently short the following spreads :

NG - short Sep call spread, 3.0-3.1

LE - short Sep put spread, 112-110

ZW - short Oct call spread, 560-580

GC - short Dec put spread, 1180-1170. Opened yesterday and want to give this one plenty of time to recover. I have a
unhealthy relationship with GC - I don't quite understand it and it's fundamentals as yet. I want to get familiar with its behaviour and the best way for me is to have some skin in the game. Thus, I opened this trade (with a small allocation) even though it is not a screaming one.


On my short spreads, I'm intentionally selling close to the money, but in smaller quantities, rather than selling larger quantities of lower delta, further OTM. This suits my trading style better.

Regards

There is s good reason that volatility in the meat markets is high.

I sell close to the money if I have a clear opinion about the next move of the underlying. And I sell OTM, if I predict a more or less sidewards market, but I am not so sure about the direction. And in case I want to make use of a high volatility. Advantages of selling ATM: Less margin; smaller movement of option price (compared to OTM options) in case of large move of the price of the underlying. Advantage of selling OTM: They usually loose value quicker.

I prefer selling approx. 100 DTE, and to buy back at 50 %. Helps me to sleep better.

I hold the short NGX C3. This trade should be supported by seasonals and by El Nino. The probability of this phenomenon in fall / winter has been increased to 70 % recently.

Regarding Live Cattle, I just sold the LCZ P106. In my opinion, LC price should move upwards slowly for some weeks. But watch the ES future: In case it moves downwards severely LC often follows.

I am currently long wheat via the WZ8-WN9 spread. Weather in all wheat producing countries with the exception of the US does not cooperate.

I rarely sell Gold options. It looks almost like a currency to me, and my longterm results show, that I am not good in sellling options on currencies.

Good luck !

Best regards, Myrrdin

About Gold I found this. The Macro Tourist | GOLD: THE CHINESE HAVE CHANGED THE WAY THEY LOOK AT IT
I sold some Gold October puts 40 days a go and sitting ATM(1180) with 39 days to expire. Any thoughts?
Thanks
Babak

About Gold I found this. The Macro Tourist | GOLD: THE CHINESE HAVE CHANGED THE WAY THEY LOOK AT IT
I sold some Gold October puts 40 days a go and sitting ATM(1180) with 39 days to expire. Any thoughts?
Thanks
Babak

I don't understand selling options so close to ITM, which are now ITM. You might as well do futures. The chances of those trades being losers is so much higher than further OTM options.

I don't understand selling options so close to ITM, which are now ITM. You might as well do futures. The chances of those trades being losers is so much higher than further OTM options.

Thanks Ron and Myrrdin for your insightful feedback. The reason why I do this is because it suits my trading style, risk/reward tolerance etc. I do not worry in the slightest if my short spreads go ITM, as long as I have some time left before expiry - in fact, I expect them to go ITM, cos I sell so close to 50 delta for the shorts. These spreads fluctuate a lot as they are so sensitive to the underlying. And I like that. My ZWV8 560-580 short call spread was showing a loss last week, and is now at a healthy profit, and will probably show a loss again soon. These swings are tradable.

And yes, I could this with futures (and will one day), but for now, I want exposure to commodities using a derivative that I understand and love. Once I get more familiar with the nuances and personalities of the individual commodities I will be exploring other ways to trade. I expect a year from now my trades will be very different to what they are now. I'm very much in the process of refining and fine-tuning.

Just today I closed a ZWU8 short call spread (550-570) - this went in the money for a while, but ZW is a great candidate for this sort of spread. Sold on 26-Jul for 6.25, and bought back today at 1.25 giving a 34.7% return on the max loss possible. I realise the monthly ROI is a widely used indicator on the forum, but it may not be very significant here as it a ridiculous 59.8%.

Peace.

Thanks Ron and Myrrdin for your insightful feedback. The reason why I do this is because it suits my trading style, risk/reward tolerance etc. I do not worry in the slightest if my short spreads go ITM, as long as I have some time left before expiry - in fact, I expect them to go ITM, cos I sell so close to 50 delta for the shorts. These spreads fluctuate a lot as they are so sensitive to the underlying. And I like that. My ZWV8 560-580 short call spread was showing a loss last week, and is now at a healthy profit, and will probably show a loss again soon. These swings are tradable.

And yes, I could this with futures (and will one day), but for now, I want exposure to commodities using a derivative that I understand and love. Once I get more familiar with the nuances and personalities of the individual commodities I will be exploring other ways to trade. I expect a year from now my trades will be very different to what they are now. I'm very much in the process of refining and fine-tuning.

Just today I closed a ZWU8 short call spread (550-570) - this went in the money for a while, but ZW is a great candidate for this sort of spread. Sold on 26-Jul for 6.25, and bought back today at 1.25 giving a 34.7% return on the max loss possible. I realise the monthly ROI is a widely used indicator on the forum, but it may not be very significant here as it a ridiculous 59.8%.

Peace.