Good for you for exiting this nonsensical volatility.
And to all the other traders out there who have not fallen into TraDaTor's mindset about being afraid of this market?
Ag trade ideas
- Thread starter TraDaToR
- Start date
Good for you for exiting this nonsensical volatility.
And to all the other traders out there who have not fallen into TraDaTor's mindset about being afraid of this market?
Hello.
I want to say that exist some interesting news from the: www.farmprogress.com internet site for the Grains.
It is here: www.farmprogress.com/market-reports/shortage-scare-keeps-wheat-prices-red-hot
I watch the Wheat because likes me a huge but i have not any futures contract right now in the three major varietes of Wheat: CBOT Wheat, KCBT Wheat, Minneapolis Wheat.
Kind Regards,
George Kanellopoulos.
It was the Wheat, the Wheat! It was on the move again,
From the farms of Illinois and Iowa, from the ranches of
Kansas and Nebraska, from all the reaches of the Middle
West, the Wheat, like a tidal wave, was rising, rising. Al-
mighty, blood-brother to the earthquake, coeval with the
volcano and the whirlwind, that gigantic world force, that
colossal billow, Nourisher of the Nations, was swelling and
andvancing.
-Frank Norris, The Pit.
I want to say that exist some interesting news from the: www.farmprogress.com internet site for the Grains.
It is here: www.farmprogress.com/market-reports/shortage-scare-keeps-wheat-prices-red-hot
I watch the Wheat because likes me a huge but i have not any futures contract right now in the three major varietes of Wheat: CBOT Wheat, KCBT Wheat, Minneapolis Wheat.
Kind Regards,
George Kanellopoulos.
It was the Wheat, the Wheat! It was on the move again,
From the farms of Illinois and Iowa, from the ranches of
Kansas and Nebraska, from all the reaches of the Middle
West, the Wheat, like a tidal wave, was rising, rising. Al-
mighty, blood-brother to the earthquake, coeval with the
volcano and the whirlwind, that gigantic world force, that
colossal billow, Nourisher of the Nations, was swelling and
andvancing.
-Frank Norris, The Pit.
Well...It turns out the day of the invasion was just an appetizer. On March 2nd, the day that Joe Vaclavik called "the great wheat spread disaster of 2022" on his podcast, I died. I made a daily loss 2 times larger than my biggest daily gain. All my perceptions of what calendar spreads were supposed to do were shattered.
Let's just say I was long size on ZW and KW May fly. Not only those butterflies went in historical and logical no man's land( K/N is supposed to be the intercrop and N/U the first new crop spread ), they did it in the matter of minutes. I closed ZW K fly around -40 at market, removing all bids, crapping my pants. At the same time, I was long energy but on some weird strategies that kept dropping like rocks. Icing on the cake, I was short some '24 illiquid ZW and KW spreads, the kind where the front month move is repercuted on settlements, but you can't liquidate anything before days on large moves.
Now, things have settled a bit, but I remain cautious on what Russia may bring us. A few lessons to learn here :
- I am still alive. The daily loss was huge but the monthly loss of march is just a fraction of my most lucrative month( December 21 ). I am now back in positive territory on the year, even if I still have work to do to come back to my early feb equity peak. I also did it without much despair. I regrouped fast. It's easier when you have been trading professionally for 15 years plus...Sometimes you just have to survive.
- What I did in the next 2-3 days after the big loss clearly saved my ass. I recognized I didn't understand much of what was going on, especially on energy. I closed some double butterflies ( Gasoil K double flies for example ) that were clearly in the green, but I felt like I was just throwing darts in this environment. Guess what? It just had the nastiest spikes downwards in one of the most bullish environment just days after I closed them. Enjoy. I also managed to close some of my back month wheat spreads, bidding continuously, but also removing asks when those appeared "value" compared to other spreads. Think about crossing 10 cents bid/ask spreads at times...Ouch! I view those days as perhaps the best trading I did in my life.
-Don't expect anything that looks like a permanent China's Wall on historical datas( full carry, positive producer margin, 0 value...) to remain eternally. During price shocks, those levels get perforated and you aren't the only one looking at those pretty levels, meaning there are probably some whales who will have to unload in poor fashion just like you, exacerbating the move.
-When volatility really hits, close whatever you have on book that is more complex than a butterfly. Double flies or complex relative spreads between commodities just explode up or down without any common sense. When a thing like Ukraine hit the fan, the message is clear for certain markets. Just express your view simply.
-Stay away from shorting longer dated spreads even if they will probably end up at expiration in normal territory, the spikes during the early stages of the contracts can be disatrous for your account.
Here are my thoughts on what happened for my trading in March 2022. I know you all became millionaires by buying $WEAT , USO and wheat or crude backed cryptos, but some may have some more articulate things to share...LOL
Let's just say I was long size on ZW and KW May fly. Not only those butterflies went in historical and logical no man's land( K/N is supposed to be the intercrop and N/U the first new crop spread ), they did it in the matter of minutes. I closed ZW K fly around -40 at market, removing all bids, crapping my pants. At the same time, I was long energy but on some weird strategies that kept dropping like rocks. Icing on the cake, I was short some '24 illiquid ZW and KW spreads, the kind where the front month move is repercuted on settlements, but you can't liquidate anything before days on large moves.
Now, things have settled a bit, but I remain cautious on what Russia may bring us. A few lessons to learn here :
- I am still alive. The daily loss was huge but the monthly loss of march is just a fraction of my most lucrative month( December 21 ). I am now back in positive territory on the year, even if I still have work to do to come back to my early feb equity peak. I also did it without much despair. I regrouped fast. It's easier when you have been trading professionally for 15 years plus...Sometimes you just have to survive.
- What I did in the next 2-3 days after the big loss clearly saved my ass. I recognized I didn't understand much of what was going on, especially on energy. I closed some double butterflies ( Gasoil K double flies for example ) that were clearly in the green, but I felt like I was just throwing darts in this environment. Guess what? It just had the nastiest spikes downwards in one of the most bullish environment just days after I closed them. Enjoy. I also managed to close some of my back month wheat spreads, bidding continuously, but also removing asks when those appeared "value" compared to other spreads. Think about crossing 10 cents bid/ask spreads at times...Ouch! I view those days as perhaps the best trading I did in my life.
-Don't expect anything that looks like a permanent China's Wall on historical datas( full carry, positive producer margin, 0 value...) to remain eternally. During price shocks, those levels get perforated and you aren't the only one looking at those pretty levels, meaning there are probably some whales who will have to unload in poor fashion just like you, exacerbating the move.
-When volatility really hits, close whatever you have on book that is more complex than a butterfly. Double flies or complex relative spreads between commodities just explode up or down without any common sense. When a thing like Ukraine hit the fan, the message is clear for certain markets. Just express your view simply.
-Stay away from shorting longer dated spreads even if they will probably end up at expiration in normal territory, the spikes during the early stages of the contracts can be disatrous for your account.
Here are my thoughts on what happened for my trading in March 2022. I know you all became millionaires by buying $WEAT , USO and wheat or crude backed cryptos, but some may have some more articulate things to share...LOL
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Thank you for sharing. I really would like to run some of these spread trading strategies in TT's backtester to see how they perform in high vol environments.
Your comment on double butterflies is insightful "boots on the ground" info. From my limited knowledge, double butterflies are ostensibly safer and "well behaved". Obviously high volatility causes these relationships to break down.
Any other good sources of info outside Joe Vaclavik? Looking for something I can listen to on drive to office.
Anyone getting long oats here? Seems cheap.