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Today Oct 5 I sold NGf8p265c425 strangle for 0.063. IM is only $306. Because of the low IM I am using 10xIM. If I can exit at 30 days the ROI will be 10.0%.
I hope to exit before cold weather arrives. NG is usually range bound in Oct.
I debated doing the NGf8p2.45c4.90 strangle. Decided things are calm right now so I didn't need to be further OTM right now.
I closed the GC G8 Call today at 80%. I expected some weeks ago that the Put will be decay earlier, but it was the other way round. All tension seems to be out of world politics.
The Put is still open and DTE is 11, so I may have an opportunity to sell Calls again, e.g. if Rocketman becomes active again.
NG is slowly losing its value and I hope to close that end of next week.
I'll consider then selling Calls because of seasonality.
The ZB Dec 17 P147 is under water (-180% at this time), but I do not expect the market to fall much longer. If ZB goes under 150 I will roll.
The P141 offers some protection, but not overly much. The next time I will do the spread tighter.
(ZB always lures me with its apparent calmness, and once I am in it it likes to move all of a sudden)
I also have opened:
LEZ7 C130
ZSH8 P860 (very small position)
The ES 2-3 spread posted earlier this week by Ron (whom I follow blindly for everything ES)
CL Position: initial Ratio Spread: (-3x63C Mar.18 / +1x60C Mar.18/) and some Short 65C Mar.18. Whole Position is quite big, about the double of the normal Risk of 2%. Fundamentaly very short, Production is on pre hyrrican levels now, about seasonal avarage, additionaly to hat comes a short seasonalyty. So, quite tempting to sell calls.
Looking for:
900 Puts on Gold with good Premium, not so sure how long i going to wait for it. Probably until Gold hits 1200 and breaks this level....
Short Coffee - waiting for rains..
Long Soybeans - waiting for USDA Report
and short Natoral Gas - well, not so sure about how to trade it, but if a rallye appears, i going to sell some calls on volatility spikes.
The risk regarding CL (and NG) is La Nina. If you look at a seasonal chart only inluding years with La Nina since 1990, it is clearly bullish from October until January, whereas in "normal" years it is clearly bearish.
The weather forecasts changed their probability for la Nina short time ago from close to zero to 60 %. This development made me buy back my CL calls. I do not intend to sell options in CL (and NG) until it is clear if La Nina will visit us or not. A probability of 60 % gives a success with almost the same probability as flipping a coin.
Currently I hold the following positions in the short option portfolio:
LHZ C62
LHG P60
LHJ C80
Longterm. The February contract looks undervalued, although it might see the 60 again before turning upwards. Cash is weak. Intend to sell LHG calls at significantly higher price of the underlying.
Meanwhile I rolled the LHZ C66 downwards as a hedge of the LHG puts, as cash price remains weak.
Sold some April calls, and intend to add puts at a lower price of the underlying.
LCZ P104
LCZ C124
LCG P102
LCG C134
Longterm.
CTH C75
Sold cotton calls again, and intend to hold them longterm.
Two small lots of ESF ATM put and call spreads. I hold them in my stocks account, where a delta-neutral strangle has the same (even a bit smaller) margin as an outright position.
I hold a number of further positions, but - due to the low volatilities - I prefer outright future positions or future spreads.
In my opinion and according to seasonals, wheat will move sidewards / downwards for a couple of months. There is a lot of wheat around world-wide. I intend to sell some calls (March contract) at a higher price of the underlying, if given the opportunity.
The situation is similar in coffee. I bought back some calls with a profit recently, and intend to sell again at a higher price (March contract).
I do not intend to sell options in the corn or beans market. Premium is very low, and risk of La Nina is high. For the same reason (uncertainty regarding La Nina) I avoid the energies.
Most of my current option trades are in the meat markets, as in my opinion risk and reward are fairly balanced. But it is important to understand the fundamentals. And: You have to be aware of large unexpected price moves. That is why I prefer strangles.