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I believe this particular report and some older dated reports, from 31 August, explain to some extent what has been dragging live cattle price down.
What really do not cease to amaze me is that all the data on meat complex oversupply and bias towards lack of demand was featured across the web, including reports from the Dailystockreports and not only.
To my opinion, market was ( and effectively is ) oversupplied , although remained steady owing to expectations of stronger demand that had to absorb higher supply. As we all know from the news, higher demand failed to show up.
Few days ago i was considering selling call ( which would be beautiful ) , however i reconsidered my idea of being short call set owing to huge discount to cash and furthermore, bullish seasonals. In addition, I received an email from my broker suggesting selling LEZ P96. I did not want to sell that high deltastrike and ultimately ended up selling LEZ P87 which was about 3.00 delta on the sell date. My options premium almost quadrupled yesterday at close, however today futures up, volatility down i am intended to close my puts out.
thanks for the write up. Have you ever considered selling a spread closer to the 50 delta and since its Dec options.. just leaving it .. u have much better risk/reward.. and a move say to 105 and u can take it off with decent profit.. and if that happens a month or so from now.. even better.
Currently I hold the following short options positions:
CLF C58-63 (stop loss on a close of the future above the August highs),
CTH C80 (stop loss on a close above the high of August 12th),
CZ C3.6 (small lot; stop loss on a close above the high of July 28th),
LHZ C62 (stop loss on a close above the August highs).
There will be an USDA Report out Monday, which affects corn and Cotton prices.
I intend to re-enter the ES puts on a lower level. CL and CT show some correlation with the Indices, and, thus, the ES puts help to balance the portfolio.