I closed out my SEP19 (CORRECTION: THIS WAS THE SEP19, NOT JUL19 that I said earlier. This is a correction.) Crude Oil 45-strike PUTs today with a loss. I had sold them for 0.17, and made a closing purchase today for them filled at 0.36, resulting in a loss of $190.
I also put in a GTC order to close out my DEC19 Corn 330-strike PUTs today to buy them back (closing purchase) at 4.00 cents.
Comments: The China talks have run all energy and grains down today. This JUL19 45-strike PUT had already run up of the “200% rule” once – and I kept it. This morning with the trade talks going south, I got out of this option with a loss – to avoid a larger loss that so easily happen. I do realize that things could turn back up quickly, but not a risk I have chosen to accept. I cannot, nor can anyone else, foretell what can happen next. I need more than a 50-50% to abide a trade. This is not a battle I want to fight by trying to hold this position.
I have a similar feeling, but not as urgent – about my short DEC19 330 PUT Corn trade. The USDA/ WASDE monthly report out at noon EDT tomorrow; it will likely continue to show Corn with large inventories even though there is talk of a lower yield due to weather delays for planting– this possibility is not usually forecast this early in the year on the WASDE reports. I want to get out of this trade because I cannot see much predictable about what might happen next. Better to avoid the risk, and go shop for another trade with much more favorable odds.
Until the stock market can stabilize, Gold prices may go up a little more. For now, I am comfortable with my AUG19 short 1450 CALLs and my short SEP19 1500 CALLs.
The profits I have currently in the Soybean NOV19 short 1100 and short 1200 CALLs, make up for some of the loss on the oil PUT today, but I will continue to hold them for now. This volatility and “political positioning” might open up some opportunity for new trades very soon. It is much easier to cope with market fundamentals and seasonal price patterns in commodities– than it is to portend what trade talks and people in Washington DC might do. I will make every effort to be patient and will be searching for opportunities that can come at any time. – Don
Summary of my Positions 09 May 2019:
Short SEP19 Crude Oil 80-strike CALL for 0.17
Short Strangle: Short the JUL19 Crude Oil 75-strike CALL for 0.11 ($110) Short the JUL19 Crude Oil 50-strike PUT for 0.15 ($150)
Short the NOV19 Soybean 1200-strike CALLs for 2.125 cents.
Short the NOV19 Soybean 1100-strike CALLs for 3.0 cents
AUG19 Gold 1450-strike CALL for 1.00 ($100)
SEP19 Gold, the 1500-CALL sold for 0.70
and the 1160-PUT for 0.90 – a Total of 1.60 ($160)
Short the DEC19 Corn 330 for 2.0 cents ($100.) GTC outstanding to close @ 4.00 cents entered today (5/9/2019)
Closing trades with a loss is always difficult. I never like it or get used to it, even though I’ve been at this long enough to know with certainty that some losses are always a part of the trading experience. It is always a little comfort to have other positions with profits – as I have to take a loss now and then. – DAS
The commentary and examples are for teaching purposes only and are not intended to be a trading or trade advisory service. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein on the web site and/or newsletter, are committed at your own risk, financial or otherwise. Trading with leverage could lead to greater loss than your initial deposit. Trade at your own risk. Investors and traders are responsible for their own investment/trading decisions including entries, exits, position, sizing and use of stops or lack thereof. This is not a trade advisory service and is for educational purposes only. The content on the pages here is believed to be reliable - but we cannot guarantee it.