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Grains & Beans


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Grains & Beans

  #271 (permalink)
Hiraphor
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SMCJB View Post
That chart I showed above. Settle last night was $4.27. Current bid/ask is $8.20/8.25. So the butterfly that has a 30 year range of -$4 to +$4 has moved $4 this morning! I'm sure that liquidations is part of the factor, just saying it's happening everywhere.

Question is could it be potentially very profitable to trade against those liquidation type movements.. from my first post the spread has already moved from -26 to -21.. taking a small long position

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  #272 (permalink)
 
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 SMCJB 
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The thing you have in your favor is time. That Dec22 is 8ish months from expiration. The big issue with the CL trade I posted (which I have one the wrong way around) is that expiry is only 3 months away!

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  #273 (permalink)
Hiraphor
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Wondering if @myyrdin has a take on it, being a bit of a grains spread wizard

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  #274 (permalink)
Hiraphor
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SMCJB View Post
The thing you have in your favor is time. That Dec22 is 8ish months from expiration. The big issue with the CL trade I posted (which I have one the wrong way around) is that expiry is only 3 months away!

You have the CL trade the wrong way round!? ie you expect the dislocation to become even worse? why?

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  #275 (permalink)
 
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 SMCJB 
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Wrong way meaning I'm losing money, expecting it to revert.

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  #276 (permalink)
 myrrdin 
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Hiraphor View Post
Wondering if @myyrdin has a take on it, being a bit of a grains spread wizard

No - sorry. I am following this discussion, and I had a look at the spread.

Unfortunately, MRCI currently does not show the December spreads to compare the spread with former years.

I consider this spread to be mispriced - I cannot find a good reason for the spread trading at the current level.

The problem with these trades: You never know if there will be more mispricing in the future. Thus, you have to keep the size small.

Good luck Myrrdin

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  #277 (permalink)
Hiraphor
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myrrdin View Post
No - sorry. I am following this discussion, and I had a look at the spread.

Unfortunately, MRCI currently does not show the December spreads to compare the spread with former years.

I consider this spread to be mispriced - I cannot find a good reason for the spread trading at the current level.

The problem with these trades: You never know if there will be more mispricing in the future. Thus, you have to keep the size small.

Good luck Myrrdin



Here is the graph I think you're looking for. Last price forward filled from the 28th Feb for 2022 (the straight line).

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  #278 (permalink)
 myrrdin 
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Hiraphor View Post


Here is the graph I think you're looking for. Last price forward filled from the 28th Feb for 2022 (the straight line).

Yes, thank you. If my interpretation is correct, we have reached an extreme value of the spread.

Best regards, Myrrdin

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  #279 (permalink)
 
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 Schnook 
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With May wheat locked limit up it's very difficult to even guess where this spread ultimately trades, but I kinda want a piece of it. As @myrrdin already mentioned, size would have to be small because you just can't handicap the risk on something like this but it's still tempting...

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  #280 (permalink)
 
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 SMCJB 
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Wheat going to be limit up again, 3rd day in a row, +130 to 1424.

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