27 August 2019 TUESDAY Trade Commentary & Corn Calls closing trade

27 August 2019: Greetings

Closing Trade:  I bought back (closing purchase) my short Corn DEC19 430-CALLs for 2.50 cents.  I  sold them for 4.375 on August 14th, so the profit excluding commissions is:  4.375 – 2.50 = 1.875 cents X $50 = +$93.75.

The return on investment (ROI) = 93.75/$801 (initial margin )= 11.7% return in the 16 days.  Of course, there is never a guarantee of such results and losses do sometimes occur.

If you made this same or a similar trade, consider that trying to get that “last drop” of profit by putting your exit order too far “away” may not be to your advantage….. a bird in hand worth two in the bush…and all that.


Comment: I decided to take this quick profit for a couple of reasons.  With the market volatility, I felt it was prudent to “bank it” while it’s there.  Secondly,  as I have discussed extensively in prior commentary – the USDA probably has not yet put in accurate planted acres for the new crop (2019-2020) and the next USDA WASDE (World Ag Supply-Demand Estimates) is coming up in about two weeks.  Any one following any of the markets lately fully understands that markets are volatile – and we are as one of the commentators put it, “one tweet away” from huge price swings.  My plan is to sell MORE DEC19 Corn CALLs.  At what price and when is TBD (to be determined.)  

For two weeks now, I’ve been shopping for Gold options to sell.  Frankly, the gold market has made very unusually wide price swings over the last few weeks.  No doubt there is money being placed in Gold, whether through ETF’s, mining stocks, coins, or the commodity.  So long as the markets (especially the stocks) have these huge swings, gold will continue to be subject to these volatile price moves.  The risk of just selling a Gold PUT right now, since prices have run up quite a lot— is, I think, HIGH. Having said that, there may come a time soon when something happens so I can see where a new “bottom” or support-area could be forming.

Because of this volatility, I am watching my short Crude Oil strangle just as closely, and when/if  I can exit with a profit similar or a little less than today’s Corn trade, I will take the profit just as quickly.  These are tricky times for all sorts of traders.

Summary of positions as of 27 AUG 2019:

The only position I hold at this time are the Crude DEC19 short strangles.  You can see the origination of that trade here:

I’ll keep this short this morning, so I can go ahead and post today’s commentary and the closing trade early in the day.

Thank you and good trading to all. – Don

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