Below is an illustration trading futures options on Corn. Our post shows an option spread.
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Corn * Directional & Neutral Positions
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Volatility
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Skew to the upside on calls with imiplied volatility below slightly higher than historic levels.
Commentary
- Lack of data from government shut down though eyes on WASDE later in week
- Info from other sources enough for some buying activity
- Locked in range 367 - 387 with wait on trade war and government
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Notes:
Contract Size - 5,000 bushels (~127 MT)
Tick Size: Cents per bushel. 1/4 of one cent per bushel ($12.50 per contract)
Trading Hours: Sunday – Friday, 7:00 p.m. – 7:45 a.m. CT and Monday – Friday, 8:30 a.m. – 1:20 p.m. CT.
* Tip: Understanding what the numbers mean when looking at Corn prices. The quotation you see is U.S. dollars and cents per 1/4 tick. Each contract you are buying or selling is cents per bushel. A 1/4 cent tick move is $12.50 USD. Options move in 1/8 cent tick or 0.125 cents which is $6.25 USD.
?ml=1" class="modal_link" data-modal-class-name="no_title">* Tip: Click here to read a helpful tip about Corn futures and options
Corn
Charts to reference below. Note the chart and graphical analysis below reference March. At the ranges till receiving more news on government shutdown status and China.
Daily Chart below.
* Tip: To view a larger chart image, simply right click on the image with your mouse. Next, select view image. Be sure to click the back arrow on your browser to go back to the original page.
?ml=1" class="modal_link" data-modal-class-name="no_title">* Tip: Click here on enlarging images
Option Strategy -
Below is an illustration of a broken wing iron condor at a credit covering the range above. The structure could be adjusted on extreme moves with Jan WASDE coming out below. Strategy is modeled with the assumption that average implied volatility dips after absorbing news on China and government status in the upcoming week.
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