04 June 2019 TUESDAY newsletter closed corn PUTs

Greetings:

Closing Purchase today:  I closed out my short DEC19 Corn 330-strike PUTs today for 1.375.  I had sold them for 2.00, so there is a very small profit here of 2.0-1.375 = .625  X $50 = +$31.25 (excl. comm.)

Short the DEC19 Corn 330  for 2.0 cents ($100.)  Position now closed.   

Though these 330 PUTs are very far OTM, the risk-reward for holding them now is not there at all.  So I’m clearing them out now and moving on.  The seasonal price pattern for DEC19 will be DOWN after we get past this price run up on late planting.  Now, I’m shopping to sell CALLs as far up as possible.

Quantity   1 each: $31.25
Quantity   5 each: $156.25
Quantity 10 each: $312.25

(excl comm.)


New Trade Today:  Gold DEC19  Short Strangle: Selling the 1150 PUT and the 1700 CALL for 1.9 ($190).  Initial net margin: $604.  Expiration: November 25, 2019  (174 day until expiry.)  Potential ROI*: 31.4%  Prob. OTM: 98%.  I got 1.40 ($140) for the 1700C and .50 ($50) for the 1150P.

Here’s the chart: 

Comment: Some traders might opt to cut it closer but I like the 1700C/1150P.  These options expire very near the USA holiday Thanksgiving, the last week of NOV 2019.   I continue to hold my Gold  SEP19 short 1500-strike CALL but watching it closely.

I really want to sell those DEC19  Corn CALLs, but so far, I’ve decided to wait until AFTER next Tuesday’s (corrected) WASDE report on the JUN19 report,  out at Noon Eastern time on 11th June 2019.

Important:  I mentioned in a recent comment about how the USDA reports facts and it is left up to analysts to come up with scenarios about what could happen.  Dan O’Brien of Kansas State University has done exactly that.  There is no doubt that the corn crop will be reduced acreage and reduced yield, the question remains how much, and how does that effect prices.  Mr. O’Brien has four scenarios in his latest newsletter, see video below and download the report here: https://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter/us-corn-market-outlook-late-may-2019

KSU O’Brien report download link: https://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter/us-corn-market-outlook-late-may-2019 

Summary of my Positions 04 JUNE 2019:

 Short SEP19 Gold 1500 CALL for 0.70


DEC19 short strangle  30 PUT and 90 CALL for .30 ($300)    I got 0.20 ($200) for the DEC19 30 PUT, and sold the DEC19 90 CALL for 0.10 ($100)


New Trade Today:  Gold DEC19  Short Strangle: Selling the 1150 PUT and the 1700 CALL for 1.9 ($190).  Initial net margin: $604.  Expiration: November 25, 2019  (174 day until expiry.)  Potential ROI*: 31.4%  Prob. OTM: 98%.  I got 1.40 ($140) for the 1700C and .50 ($50) for the 1150P.


Just so you know: A web-TV show with weekday morning ag summary (grains.) There is a free APP for iOs and Android for the Farm TV Journal.  You can download at your app store.


Don A. Singletary

 

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