I'm going to babble for a few minutes about wheat...WEAT

ironchef said:
I wasn't going to post but I think @PPC didn't know you are an options expert so this post is also for him.

Your OP is kind of misleading. Most who read it couldn't tell you are a high net worth individual, that you are an expert option trader with decades of trading under your belt and that you have a large well diversified portfolio.

IMHO, you are quite safe even if hyperinflation suddenly appears because you are already well diversified.

Writing covered calls to collect some premium seemed a no brainer especially since it is a black swan protective move and you can afford to hold long term?
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I have NEVER said I am an expert trader!! I do have decades under my belt.

The last time I checked, about 7% of all options were covered calls. Not a big portion by any means...But, it can not be totally ignored.

I am more of the boring investor who looks for under valued stocks/ETFs, then buys them. Maybe an industry leader that had a bad quarter (think DuPont).

I would say about 20% of my stocks (ETFs) are optioned. The others just sit and (hopefully) grow...Think QQQ.

I use to post on the options page...But now, I just use my journal page for most of my thoughts and trades.

With WEAT, I wanted to get a dialog started, to try and see all sides of the issue (trade).
 
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Cabin1111 said:
I have NEVER said I am an expert trader!! I do have decades under my belt.
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Don't sell yourself short. Be able to consistently make money doing covered call/CSP is not easy.

I gave up on them early on because I couldn't beat buy and hold writing covered calls or CSP.
 
Cabin1111 said:
So I have bought this in my IRA...Several hundred shares. I purchased it a few years back for inflation protection (super inflation). This is when Biden (and congress) were spending and printing money with no end in sight. There seems to be no end in sight with the printing of the money even now.

I own stocks like BG and ADM. They are long term investments and inflation protection buys. I've had them for 15 years or so.

So here are my issues. WEAT earns nothing...I have optioned it once or twice over the years. It doesn't move greatly. It moved during the Russia's invasion of Ukraine. Wheat is not like oil...It can be stored somewhat. If major ports were to go down, the product could still get to market. It could be fed to cows, pigs, goats, people, zoos, you name it.

Should I consider optioning this ETF (it really is an LLP when you come down to it)? The option money is not that good...I get it!!

But holding for insurance (super inflation) may be the way to go...

Thoughts??
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I’ve done quite a bit of research on this using data to the 1960s. Holding TBills is a better option than holding a commodity or commodity type index. But a nice an option is to take one of the commodity indexes and use any medium or long term momentum signal. When it’s bullish buy the index etf/fund otherwise TBills.

This summary is from portfoliovisualer.com
12 month dual momentum model since WEAT inception using DBC:
Portfolio Initial Balance Final Balance CAGR
Dual Momentum Model $10,000 $13,506 2.42%
Equal Weight Portfolio $10,000 $10,018 0.01% << holding DBC
Teucrium Wheat ETF $10,000 $2,405 -10.71%
There were 21 trades in the period.

DM outperforms a moving average model in this period.
HTH
Brian
 
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