AUG ZS 13 calls @ 13
- Thread starter TraDaToR
- Start date
I just watched put and call values on different ag and soft markets and it seems OTM puts are always cheaper than calls ( same distance from current underlying market )at any time( and ags are down/ in a little bear market/correction these days ). Why is that?
The trade is looking good now.
The trade is looking good now.
1) Financial commodities; i.e. stocks, bonds & currencies, "panic" to the downside. Volatility explodes on downmoves. That is why put-options tend to trade expensively.
2) Physical commodities; i.e. grains, metals & energies, "panic" to the upside. Volatility explodes on upmoves. That is why call-options tend to trade expensively.
Thanks.
So what? Just sell calls and buy puts everyday and you'll get money in the end?
Looking at charts it makes no sense at all( not criticizing your analysis but the way markets are quoted ).
I think indexes have expensive puts because volatility really is higher in a bear market( because of the number of long only players ), but commodites have the same kind of behaviour in a bull and bear market( last year downtrend in oil, ags...was volatile ).I agree there are some uptrend spikes in commodities( equivalent of crashes/mini crashes in indexes) but the daily range is about just the same.
So what? Just sell calls and buy puts everyday and you'll get money in the end?
Looking at charts it makes no sense at all( not criticizing your analysis but the way markets are quoted ).
I think indexes have expensive puts because volatility really is higher in a bear market( because of the number of long only players ), but commodites have the same kind of behaviour in a bull and bear market( last year downtrend in oil, ags...was volatile ).I agree there are some uptrend spikes in commodities( equivalent of crashes/mini crashes in indexes) but the daily range is about just the same.