Comments: It’s a week of earnings reports for major stocks and the Indexes are steady and supported. The China/USA trade talks have some good news, though still fragile as we wait for details and an official agreements.
Unlike recent weeks and all the volatility, this last week has been slow and steady and most markets not really making any remarkable moves. The good news is that “slow and steady” is good news for option-sellers. Crude hasn’t budged $2 a barrel for two weeks now. Corn prices basis the DEC19 contract are this morning trading at 388.25 per bushel. I am still short the DEC19 420 CALLs and the harvest is fully underway. And Gold prices are steady also; with the stock market UP and steady, the stream of money from stocks to gold (“safe-haven-effect”) has slowed.
Summary of my current positions as of TUESDAY- 22 OCT 2019:
FYI: You may click the gold-colored Trade Origination button to see the original post on the date the trade was placed.
Crude Oil FEB20 short strangle, the 80 CALL and 35 PUT
Short DEC19 short 420-strike CALL
Short the FEB20 1900-strike CALL for 1.9 ($190).
As I mentioned in my last post, I’m looking for a chance to add a PUT to my FEB20 Gold position. I am short the 1900 CALL in that class already, adding a short PUT would form a short strangle. The 1350 PUT has traded 1.5 to 1..7 ($150 to $170) this morning . The OI (open interest) is 2,664 and the volume at mid-morning is only 25. I would rather sell the $1300 strike PUT ; it has twice the OI but at present, not enough premium. You of course can take a look for yourself at the matrix and make a decision for yourself. You might study the strikes from $1400 down to $1300, the Prob OTM in that range is 87.69% at $1400, up to 97.86% at the 1300 strike.
Summary: I am quite content at the moment to be ahead on my Crude and Gold positions, and about even on my short DEC19 Corn 420 CALLs. So the plan this week is to relax a bit and continue to gather decaying time premium. Have a great week ahead. – Don
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