05 November 2019 TUESDAY Trade Commentary and Newsletter
November 5, 2019
Greetings: Closing three trades yesterday/today:
These 3 trades have been outstanding for a while and I’ve closed them yesterday and this morning, all for a nice profit:
Crude Oil FEB20 short strangle, the 80 CALL and 35 PUT
This FEB20 Crude Oil 80C/35P short strangle was sold for a total of 0.33 ($330) back on September 30, about 36 days ago. This trade went smoothly and time-decay did its work well. I closed out this trade for 0.11 ($110), so the profit = $330 minus $110 = +$220 profit on each strangle.
Short the Gold FEB20 1900-strike CALL for 1.9 ($190).
This short FEB20 1900-strike Gold CALL was sold for $190, also back on September 30, and I made a closing purchase at 0.5 ($50), for a net profit of $190 – $50 = +$140 on each CALL
Short Corn DEC19 short 420-strike CALL
This short DEC19 420-strike Corn CALL was sold for 1.625 ($81.25) each. I made a closing purchase at one-half cent $25) for a profit of (81.25 – 25) = +56.25 each.
I’ll be putting up some new trades early next week. After closing out these three trades, I now have no positions outstanding at the moment. The stock market has been soaring this week (so far!) and after posting record highs yesterday, at midday today -the market is steady but not really going anywhere one way or the other yet.
I didn’t place any new positions at all in October, still the last 30 days have yielded the profits taken in the three positions above. The take-away from that is: that more activity isn’t always the way to more profits. We option sellers LIKE slow and steady with no surprises.
Gold (FEB20) is trading at $1487, down by about $24 per ounce this morning – and a whopping 413 dollars below that 1900-FEB CALL that I just closed. Just two months ago, all the talk was about the money flowing into gold futures, physical gold, and gold ETF’s. As you know gold prices have an inverse relationship with the stock market. From here if gold goes UP, I sell CALLs again. If it goes DOWN, I sell PUTs. From there, I will watch for opportunity to turn that trade into a short strangle.
In the news this week are several articles about OPEC losing its world dominance of the oil market. So long as the global economy doesn’t take a huge dive, oil prices may continue to trade in recent ranges. I’ll be shopping to sell more Crude options next week.
Coming up this Friday, (8th NOV 2019) at noon Eastern Time, the next USDA – WASDE (World supply-demand estimates on grains.) This report could set the tone for price trends in Corn for the next few months. Yesterday, the weekly crop progress report indicated 96% maturity on the new corn crop, the usual average is 100% by this time of year. See that report at this link, if you like: https://usda.library.cornell.edu/concern/publications/8336h188j
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