Below is an illustration trading futures options on Chicago SRW Wheat. Our post shows bullish and bearish positions using a combination of call and put options.
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Chicago Wheat
Term Structure
Volatility
Notes:
Contract Size - 5,000 bushels.
Tick Size: Outright: U.S. dollars and cents per bushel
Trading Hours: CME Globex: Sunday 5:00 p.m. - Friday 5:45 p.m. CT with no reporting Monday
* Tip: Click here to read a helpful tip about Wheat futures and options
Charts
* Tip: Understanding what the numbers mean when looking at Wheat prices. The quotation you see is U.S. dollars and cents with 1/4 of one cent (0.0025) per bushel = $12.50.
2021 WASDE Report Release Dates: March 9, 2021 12pm ET. April 9, 2021 12pm ET.
Latest, Biggest, Busiest
Below is a snapshot with what's going on in the world of options with the most actively traded spreads.
Enlarge by right clicking mouse over each image and select 'open in a new tab'
Below is a Dec21 OZW 800/950 Bull Call Spread shown in the middle column above. I've listed alternatives below.
* Tip: Click here on enlarging images
Option Strategies
* Tip: To view a larger chart image, simply right click on the image with your mouse. Next, select Open Image in New Tab.
Below is a quick glimpse on particular 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.
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.
Reverse Calendar Put
The alternate position illustrated below is a reverse calendar put. Position has positive time decay (Theta) and benefits from a decline in implied volatility.
Vertical Swap Put
Below is a variation if the market were to move directionally lower. Position has positive time decay and benefits from an increase in implied volatility.
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