Below is an illustration trading futures options on Soybeans. Our post shows bullish and bearish positions using a combination of call and put options.
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Trade Options on Futures
Soybeans * Directional & Neutral Positions
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Listen to our Podcast Dec 21, 2020
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Term Structure
Volatility
Below illustrates where implied volatility is slightly below statistical levels.
Notes:
Contract Size - 5,000 bushels (~136 metric tons)
Tick Size: Outright: 1/4 of one cent per bushel ($12.50 per contract)
Trading Hours: CME Globex: Sunday - Friday 8:30 a.m. – 1:20 p.m. CT.
* Tip: Click here to read a helpful tip about Soybean futures and options
Soybeans
* Tip: Understanding what the numbers mean when looking at Soybeans prices. The quotation you see is U.S. dollars and cents per 1/4 of one cent per bushel. Each contract you are buying or selling is price per contract 5,000 bushels A 1 tick move is $12.50. Notional value of 1009'4 USD per contract.
Strategies
Below is a quick glimpse on the Latest, Biggest & Best option spreads that stand out in the markets. You can see this from the number of bid - offer activity and open interest as we explain in our podcast.
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The % yield shown in the diagrams below represent an estimated return on margin from projected dates shown below. The structure has positive time decay which is an advantage over holding outright options. The position would lose if price broke quickly out of the range of profitability below the zero line without any adjustment.
Bull Call
Below is a May ZS 1300/1400 bull call spread which is shown above as one of the "Biggest" or most popular trades on the books.
Broken Wing Fly
An alternative to the bull call above expressed as % yield rather than $ value above on PNL. Note the range on probability of profit for each..
The Rock
Below is an example of building on top of a spread to flatten the T+0 line (gamma reduction)
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