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Wondering if anyone has suggestions or knowledge regarding trading wheat options. I'm looking at trading this market regularly for swing trading purposes and have noticed that some days there is 0 volume associated with in-the-money strikes that are currently close to the actual spot price. Why is that and how is the liquidity in these markets for when and if I wish to scale in the future?
Thanks in advance!
Can you help answer these questions from other members on NexusFi?
Let's start with the wheat futures:
S&C, Oct 2016 volume, p. 56, qualifies the liquidity as low/very low (monthly report).
If you are used to E-minis, you will enter a new world of bad fills or limits-not-filled respectively.
Compared with the low/very low liquidity of the wheat futures, the agricultural options series
are a level lower again. Large spreads aside: When you are absolutely lucky, open interest at-the-money for the front month is 3k-5k. For the other months many strikes don't show any
OI at all; so if you manage to open a contract, you are the OI.
Why is that?
Always remember that a larger part of the commodities business bases on real production.
So e.g. scalability is very different from financial futures where only "paper" is traded.
The CoT reports show the figures.
