Beans in the teens

[Pa(b)st Prime]

I remember that break well. I believe it was on the Tuesday after a long weekend (Labor Day?) and already on the first day beans were $1.05 lower synthetically in the options pit! A freind of mine in the Bond pit came in long long two million bushels bought about 50 cents lower and he turned a mil profit into a million dollar loser. He never recovered......

Quote from FryDaddyNC1:

When Beans become leggy, watch-out, they can turn on a dime, and lock limits set in as they did in 1989 for 3 full trading days. If you were long you got killed, if you were short you made some serious money. My advise, always use options as a hedge when trading Beans, just when you think you got this puppy figured out it, just when everyone is telling you to buy, just when the news is the most bullish this puppy will turn into KOJO and will bite your head off.

 

[pkts]

Quote from FryDaddyNC1:

When Beans become leggy, watch-out, they can turn on a dime, and lock limits set in as they did in 1989 for 3 full trading days. If you were long you got killed, if you were short you made some serious money. My advise, always use options as a hedge when trading Beans, just when you think you got this puppy figured out it, just when everyone is telling you to buy, just when the news is the most bullish this puppy will turn into KOJO and will bite your head off.

When? 1989?

http://futures.tradingcharts.com/hist_SB19913.html

Are you thinking of a different year since I don't see any 1.50 move in 3 days.

Even just looking at most Beans years, I only see an average of 2-3 lock moves in a full year. And none than are 3 in a row. For a lot of years, 1.50 is the range.

I'm curious what I'm missing here.

 

[illiquid]

Continuous charts won't accurately represent what happened with each contract.

 

[Pa(b)st Prime]

Quote from illiquid:

Continuous charts won't accurately represent what happened with each contract.

That's completely correct but now I'm thinking it was 1988 rather than '89. I'll try to find a chart.

 

[Pa(b)st Prime]

Here it is.

 

[BCE]

Quote from FryDaddyNC1:

When Beans become leggy, watch-out, they can turn on a dime, and lock limits set in as they did in 1989 for 3 full trading days. If you were long you got killed, if you were short you made some serious money. My advise, always use options as a hedge when trading Beans, just when you think you got this puppy figured out it, just when everyone is telling you to buy, just when the news is the most bullish this puppy will turn into KOJO and will bite your head off.

Great point and one that few inexperienced traders think of.

 

[BCE]

Quote from Pa(b)st Prime:

Here it is.

Thanks for sharing that.

 

[pkts]

Quote from Pa(b)st Prime:

Here it is.

Thanks. I can see what you are talking about. It stills looks like less than a 1.50 drop. Is that due to the continuous contract difference or were limits lower back then?

Thats a weird chart. The volume really drops off on the spike up. I like to convince myself that IF I was in Beans at that time I wouldn't have gotten in on a decline from a high, wouldn't have gotten into a weak volume spike.

Thanks for the info, its very useful to understand the past history in futures to appreciate what COULD happen. But its also good at pointing out the deficiencies in that approach, both in the charts and in extrapolating the info into the future.

 

[Bitstream]

Quote from Pa(b)st Prime:

Here it is.

that is one ugly gap, no signs of warnings whatsoever...2001 stk mkt stuff innit.
u know what caused the sudden drop?

 

[Pa(b)st Prime]

Quote from Bitstream:

that is one ugly gap, no signs of warnings whatsoever...2001 stk mkt stuff innit.
u know what caused the sudden drop?

I remember it as a VERY VERY hot summer. (several days over 100). In fact I now recal the break came right after Taste of Chicago ended.

Often all it takes in a "weather" market is a weekend of rain followed by a forecast of cooler temps for a reversal in prices.