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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.Term Structure
Notes:
Contract Size - 40,000 lbs (~ 18 MT)
Tick Size: $.00025 per pound (=$10 per contract)
Trading Hours: CME Globex: Sunday - Friday 6:00 p.m. - 5:00 p.m. Eastern Time (ET) with trading halt 4:15 p.m. - 4:30 p.m.
?ml=1" class="modal_link" data-modal-class-name="no_title">* Tip: Click here to read a helpful tip about Live Cattle futures and options
Live Cattle
Below are weekly & daily charts for reference. F3=38.2 ; F5 = 61.8 retracements ; BB = Bollinger Bands
Current price @ 108.50
Trends on weekly, daily up.
Cross above MACDP weekly on Monday
Resistance
114.300 OB week
113.200 F5 week
111.025 50% retrace week
109.700 F3 daily
108.950 F3 daily
108.850 F3
108.725 prior high week
108.125-275 agreement daily
Support
103.825 F5 month
101.975 prior low month
101.450 COP week
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Strategies
Below is a calendarized Fly. It has positive time decay and benefits from an increase in volatility. Transitioning from summer into fall months, the option spread has the potential to benefit from both an increase in price and implied volatility with positive vega. It would lose if price declined or volatility declined.
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.
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