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Hi MJ, I have the same trading style also, but on GC and CL.
But I don't have much experience on the grain. Can you tell which grains that you normally trade for strangle?
Thanks for the clarification opts and yes I found the link of the website you posted earlier somewhere on this thread and saved it for future use. I actually remember reading your posts on Phillip's thread in forexfactory. It was unfortunate, however, that by the time I joined the forum the thread's activity had died down. I still learned a lot from reading that thread and credit a lot of my trading knowledge to it and forexfactory in general.
I see you are still using the 8 and 21 EMA's in your trading. I will have to add those to my charts. Another thing I just noticed that I failed to mention in my previous post is that CL seems to be forming a perfect bounce of the treadline starting from the june 2012 lows. From a technical standpoint, it looks like a good time to sell puts. I was thinking about selling the puts and should there be a strong break of the treadline buy back the options for a minimal loss. If however it takes a while to breakdown or goes up, the position will be in profit.
Non-Farm Payroll out tomorrow with new jobs added expected to be around 160,000. Oil and Gold futures seem to be waiting on the report before making a decisive move.
Also, not sure if anyone uses them but I found this website which seems to have some good info on commodity futures: Commodities & Futures News
Quick question for you guys, how reliable are the hightower reports provided by optionxpress? Do you have any other recommendations of websites for fundamental research? Thanks!
Crude is at the top of my radar list right now and yes I agree, the 90.00 area looks pretty solid. The only market I am in right now is gold..strangled with the 1820 calls and 1400 puts that expire on the 25th of March. Still watching wheat but the return in crude is a little better and 'faster'.
Aside from hightower I'll check out Barchart.com - Commodity, stock and forex; quotes, charts & analysis when I'm looking at option premiums. If you select one of the grains and scroll down you'll see a few contributing editors with charts or fundamental news. I scan some of the 'chartists' input and will actually read the fundamental reports that relay the weather, import/export, and how the US$ rate can influence futures prices.
Yes, I still use the 8,21,and 50. The MACD is there to look at but I do pay attention to the RSI to look for divergence. The one thing I miss about FOREX is that it is a continuous market with almost no gaps so there is a nice flow to the charts, indicators, and price action. Because futures 'close' a the end of the day the charts can look a little broken at times.....
I am a regular reader of Hightower. He is as good as anyone out there at looking at the big picture fundamentals. I, like Ron, use fundamentals and seasonal tendencies more that technicals. I have also been using more and more twitter and stock twits. I follow guys like Dominick Chirichella, Platts, and others for engergies. I have also set up a RSS feed with all of the CME reports that come out.
I have traded corn options for a number of years and just recently started to do some wheat options. With grains, understanding the seasonal tendencies is very important. Grains are volatile, they are affected by weather (actual and rumors), USDA reports, export numbers, ect ect. I tend to take smaller positions in grains because of this and I try to wait until there are oversold and overbought conditions before I take a position. With the grains, big rallies and sell-offs are often overdone, a retracement is likely. This is often the best time to sell out of the money options with inflated premium. An example was back in late August early September of last year during the drought. Corn was trading close to 850. The Dec 1050-1100 calls had premiums of $500 or higher. Of course, there are no guarantees that corn would not trade higher but the chances of it going to even 975-1000 was remote at best since cooler weather was arriving and harvesting was also beginning with the crop damages already priced in. Selling the corn Dec calls was one of my smoothest trades of 2012.
Opts also trades wheat options so I am sure he can jump in and offer his experiences too.
New crop corn futures will drop if the weather conditions are good. More so than old crop contracts.
On coffee you probably want July not June. Much more volume for July options.
KC may be one to strangle the next few months. I'd be more worried about the puts than calls so be plenty OTM on those.
I'm doing SB calls. The spike the last few days looks to be mainly technical. OI dropping and the specs were short. Very interesting how today May SB went over 19 for 5 minutes then crashed severely.