Greetings on 26 NOV 2019 TUESDAY:
I will be on vacation from NOV 27th (WED) until December 5, 2019 (THURSDAY), so there will be no post next Tuesday, December 3, 2019.
I was shopping the past few days to find some Gold PUTs to sell out in the FEB-2020. When the stock market, like the condition at present, is at or near all-time highs – the probability of a huge correction exists. Gold prices and the Stock Market prices are inversely proportional. Gold prices have come down as the Stock prices have risen to all time highs recently. The has resulted in the PUT premium being very low and worse, the open interest almost non existent on the FEB20 PUTs. I’ve been unable to find suitable premium there to sell PUTs yet. There is very little premium even at $100 below present gold prices – and that makes things far too risky to sell PUTS at this time.
Corn: I’m still shopping to sell MAR2020 Corn PUTs, but I don’t think the MAR20 has bottomed yet, so as per previous comments, I remain aside for now but am watching closely.
Crude Oil: Nothing has changed here. I continue to hold my only current open position today, my short FEB20 Crude Oil short strangle. I sold the FEB20 Crude Oil 40PUT and 75CALL for 0.14 ($140) last week. The short strangle is priced at about $80 today, up +$60 since the trade was placed. I expect this short strangle to keep dwindling premium over the month of December.
Holiday Trading: It is widely known that there will be many days of lower volume trading over the next 3 weeks due to the holidays. While I may not be trading much in this first half of December, I will be watching for unexpected opportunity. In commodity trading, this often comes in the form of price over-reactions to news events. At present, the Stocks are not moving much, nor are the commodities prices. As a result, there isn’t much to talk about at this time – and the next option-selling opportunities will be developing in contracts of the new year 2020.
My best wishes to all for a safe and joyous holiday this week. – Don
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