Oahu Education - ACE Corn

ACE Corn - June 03, 2019

Below is an illustration trading futures options on corn. Our post shows bullish and bearish positions using a combination of call and put options.

Trade Options on Futures

Corn * Directional & Neutral Positions

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HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT , THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCES RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELEY AFFECT ACTUAL TRADING RESULTS.

New crop corn had traded upwards at $4.54 with soybeans around $9.18 a bushel. Planting in general is far behind with corn just over half complete with soybeans around a third on acreage with the week leaving prices consolidating in a range.

The recent market reaction was due to planting delays while the next upcoming focus will be on yield and where we stand on global stocks. South America is picking up a lot of the export business of the U.S. and global demand for feed in light of ASF will probably be lower. The planting updates in the upcoming week will establish a reference point for acreage in the upcoming year.

Volatility

Options fall into the category of being slightly undervalued in non-volatile markets in the weekly options report.

Ask about the Weekly Option's Report for more information or watch our video.

zc vol

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

Below are charts for reference.

zc weekly

zc daily

* 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

Strategies

Below are illustration of options on futures strategies, an iron condor, broken wing butterfly and vertical call spread. We'll discuss these during our upcoming webcast this week.

zc bw iron condor post