Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
Sold a first lot of the LHZ C62 and placed orders for further 2 lots at higher prices.
Seasonals point sidewards / downwards until middle of November. Since 2007 the only years showing significant upmoves in September are 2013 / 2014 (desease problems) and 2009 (very low prices in August of below $45).
I expect cash price in December to move down below 50 this year.
Best regards, Myrrdin
Can you help answer these questions from other members on NexusFi?
Intend to sell close to the money corn puts in the near future (eg. CH P3).
The "normal" seasonals show a strong move downwards in September (2007 - 2015). But if you only look at years with a price below $4.6 at the end of August, all of them move sidewards / upwards in September. The downwards move of the seasonal chart is caused by very strong moves in years with a price of $6 and higher at the end of August.
COT data is quite bullish, although specs still have some potential to move prices downwards.
Intend to sell somewhere between $2.9 and $3.1 for the December contract.
I appreciate your previous comments. When setting you portfolio and establishing 8-15 positions, have you developed a core portfolio with negatively correlated assets? Also, do you set % of margin established with vertical spreads, and % naked, % strangles.
In reviewing others in the space, Cordier in his moderate portfolio would have 40-50% in cash, would have 60% of deployed capital in spreads, and split the rest between nakeds and strangles.
Also attempting to reduce the clump risk, or speed of drawdown, you referenced.
Also, do you still try to establish shorts at 3 delta.
I'm just trying to learn, I appreciate your patience.
I am not a system trader, but I look at each trade individually.
I do not have a core portfolio, but I try to avoid clump risk. I prefer strangles if given the chance, and I like being long and short two correlated commodities. Eg. I currently hold LC puts and LH calls. Sometimes I use outright futures or spreads to achieve this balance. As a rise in interest rates might be a problem for my ES puts, I sold some eurodollar futures (GEZ8). You will find more examples if you look to older entries in this thread.
I do not set a percentage of margin established with vertical spreads, and % naked, % strangles. I rarely trade vertical spreads, there will be more strangles if volatility is high, and more naked options if volatility is low.
50 % cash as a target does make sense to me. In case options move into the wrong direction you have a safety belt.
I do not limit myself to selling 3 delta. Usually I sell options with a higher delta, especially if volatility is low. Currently I plan to sell CH puts rather close to the money (delta approx. 40). For a delta 3 put you would get less than $40. You would have to buy a large number of these puts, and in case of a strong drop in corn price you would get a severe problem.
Please feel free to ask further questions or ask again, if I could not make everything clear.
In the meats the individual contracts trade - other than in the metals or the currencies or the indices - very independently from each other. The main reason is that meat cannot be stored easily.
When looking at the seasonals for meat, it is important to look at the right contract.