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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Term Structure
Volatility
Options fall into the category of being slightly undervalued in volatile markets in the weekly options report.
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
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Strategies
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.
Bear Call Spread
Bull Put Spread
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