Youngtrader's Commodity Journal

Im not going to talk about the coffee calls because they are damn near worthless and I am just going to try to buy them back for nothing.

Nothing was done on the sugar straddle but if sugar can pop im deffinantly willing to sell that straddle.

I did manage to sell those aug 97 cattle puts for 1.00 later in the day when cattle started to break a bit. As far as cattle goes, cash trade has been disapointing for the last week and I believe into the week before. 98-97 is what they are bidding while cattle buyers were bidding 99 and above before. Boxed beef has really went to hell as well. However this recent plummet in the cattle market is just too much and can't be justified because of some disapointing cash and boxed beef. We are coming up on major support in the august cattle market and while we are seasonally starting to top out with beef demand I expect buyers to start paying up a little more for this coming weeks cash cattle, taking advantage of this major price slide. 14 days till exp on those auggie options.

Like I said I am also short lumber and added more friday. This market is set to take a major dive (however it might not be this time and we might hold support before we do it). Fundamentally we are starting to get to the end of the construction year and nov futures have declined over 90% of the time over the past 15 years. Not to mention the freddie and fanni news coming out. If they are in trouble the housing market crisis is far from over. Looking at a chart this lumber market looks exactly like the spooz did before it broke hard to the downside. Im holding short here.

I also want to get long some auggie hog options. Possibley 74 puts for .70 we have just rallied too much in hogs. August is terribly overbought and its at a premium to the cme cash index. Also technically we have 2 big gaps that need to be filled and implied are bid up in the aug puts so everybody else must be thinking those gaps are going to be filled soon. Cash and pork cutouts however have been rallying and what an impressive rally it has been.

I also am thinking about going long in natty gas futures or doing something with options in that market

Good Trading

YT
 
yt for options sake,the 2-3 days before exp,to protect youself overnite on the straddles,you can buy the cheaper call .next strike down,and cheaper put next strike up and your still short premium,as in 2 short verticals,and take the cheap calls and puts off in the morning,put them back on at nite,you lose a little in premium erosion but your protected in case ther is an imbalance that needs to unwind for exp,,check the total of the largest open interest in the 5 or 6 strikes combined on either side of the closing price and if there is a large difference you can expect a big move at exp,if they are close you can pick whether or not to wear protection
 
Quote from ammo:

yt for options sake,the 2-3 days before exp,to protect youself overnite on the straddles,you can buy the cheaper call .next strike down,and cheaper put next strike up and your still short premium,as in 2 short verticals,and take the cheap calls and puts off in the morning,put them back on at nite,you lose a little in premium erosion but your protected in case ther is an imbalance that needs to unwind for exp,,check the total of the largest open interest in the 5 or 6 strikes combined on either side of the closing price and if there is a large difference you can expect a big move at exp,if they are close you can pick whether or not to wear protection
More...

ammo

Thanks for the advice. Im a total newbie at options lol! So are you saying this only works out with a few days left till exp? Could you provide an example? Are you basically talking about putting on an iron butterfly?

Also could you further explain about how open interest will tell you if there is a big move coming or not?

Any other advice you can give me is great man! Thanks and hope all is well with you.
 
i just used it on spy fri,haven't looked at it in years ,just started trading options again,anyway the 12 strikes around 126 ,puts and calls ,on fri were about 900,00 open int in calls and 920,000 in puts ,so basically neutral, itook the largest vol and sort of worked away from it down to 20,000,anything smaller i didn't add in,i think it was 120-130 strikes in puts and 122-132 in calls,they sort of neutralized each other out and spy went out at 126,pretty close to where it opened,the difference between 120 and 132,the spx had an 11 point range for the day so the spy probably had $1.10,spx and spy dos most of their exp starting on tue so by thur most of it is unwound and fri is a dud,i don't trade the commodities but i assume it's a similar scenario,i'ld look it up but i know little about nonequities,but if you watch it this week and see a large difference,then you know they will have to move it up or down to unwind there positions,they could be long with short calls, to capture the premium erosion,when the options expire they are left with the physical contract so they have to roll it to next month or unload it on the market,they could also just be short calls and puts for premium erosion and if you find that neutral zone,you can see if it comes up or down to meet it
 
Quote from youngtrader:

ammo

Thanks for the advice. Im a total newbie at options lol! So are you saying this only works out with a few days left till exp? Could you provide an example? Are you basically talking about putting on an iron butterfly?

Also could you further explain about how open interest will tell you if there is a big move coming or not?

Any other advice you can give me is great man! Thanks and hope all is well with you.
More...

http://www.elitetrader.com/vb/showthread.php?s=&threadid=53037

Some good info here. Lots of good options traders on this site. I would tell you to learn synthetics. eg, long call + short put = long underlying etc.

put/call parity is important for arbitrage:


call-put = stock-strike


http://www.riskglossary.com/link/option_pricing_theory.htm
 
Quote from youngtrader:

ammo

Thanks for the advice. Im a total newbie at options lol! So are you saying this only works out with a few days left till exp? Could you provide an example? Are you basically talking about putting on an iron butterfly?

Also could you further explain about how open interest will tell you if there is a big move coming or not?

Any other advice you can give me is great man! Thanks and hope all is well with you.
More...

YT, my man. the best trader i've seen under 18 (myself included in that category lol) if you want, ya can PM, i'll run you through some options knowledge.

i think ammo was refeering to buying cheaper options as disaster protection, however i dont know anything about futures options
 
Quote from malice:

YT, my man. the best trader i've seen under 18 (myself included in that category lol) if you want, ya can PM, i'll run you through some options knowledge.

i think ammo was refeering to buying cheaper options as disaster protection, however i dont know anything about futures options
More...



Thanks man! I appreciate the compliment!

Whatever you can share about the options market would be great man. I am actually thinking about opening up a stock options account (TOS maybe?) and start trading stock options as they are all primarily electronically traded so I think I could gain far more exprience in the options market by seeing whats happening in real time first hand instead of always having to call the floor to get up to date bid/offers (I feel like im not as in touch with the markets that way).

You can post on the journal or pm me.........whatever works for you buddy.

YT
 
Quote from youngtrader:

Thanks man! I appreciate the compliment!

Whatever you can share about the options market would be great man. I am actually thinking about opening up a stock options account (TOS maybe?) and start trading stock options as they are all primarily electronically traded so I think I could gain far more exprience in the options market by seeing whats happening in real time first hand instead of always having to call the floor to get up to date bid/offers (I feel like im not as in touch with the markets that way).

You can post on the journal or pm me.........whatever works for you buddy.

YT
More...

anytime :D
for me personally, i approach options wholly from a volatility standpoint, i look at the volatility smile more than charts. i'm hopin to go live soon. you are definately an inspiration
 
youngtrader(s)...

good to beyoung again ..easier to learn the greeks...

oldman like me (42), better stick to the romans (future contracts)..just short sugar SBV8...stop-loss in place.
 
You must log in or register to reply here.
Back
Top