Saturday, January 15, 2011

Anyone Notice How Vinny Vegas might have hit Jackpot Again?

Anyone Notice How Vinny Vegas might have hit Jackpot Again?  Last week before the USDA report he made some rather aggressive trades; those trades where of the bullish nature.

When he executed his plan  he did the following:
Now today he executed his plan.  On Spring Wheat he sold the cash and replaced with as mentioned above; because of liquidity

So for his three leg wheat re-ownership he sold the 7.60 (10 contracts or 50,000 bushels)July put to buy the 8.10-9.10 (10 contracts each) bull call spread for about even money.  He has opened the door to add on to his price if we rally; but he also opened the door to end up adding a loser to a good profitable price.

His other ownership strategy was to sell at the money July puts to buy serial Feb Options..........via this trade he sold the 8.10 (10 contracts) put and used that to purchase the 7.90-8.60 (100 contracts) bull call spread; he was able to get 10-1 on this trade; so if we manage to get a huge spike he can add 7.00 a bushel to his wheat price-minus what it costs to buy back the short put.

He did 50,000 bushels in each; with the first 3 leg trade done at 1-1-1 ratio; while the 2nd done at 1-10 ratio; so on his 50,000 bushels; he is actually playing it like he owns 500,000 bushels a huge rally.

For corn he did the following; sold 10 of the 5.70 July Puts and purchased 20 July 6.00 calls while selling 20 July 6.50 calls

The other 1/2 he sold 10 July 6.20 puts and purchased 70 of the Feb 6.20-6.70 bull call spreads

For soybeans he placed the same style of trades; selling the cash and using the above somewhat over aggressive re-owernship trades.

Sold 10 of the 13.80 July puts and bought 60 of the 13.70-14.40 Feb Bull Call Spreads; giving his lots of bang for his dollar if the report is friendly.

On the three leg he sold 10 of the 13.00 July puts and purchased 10 of the 14.00-16.50 bull call spreads

All of his trades where near free trades and the cash futures he locked in where 8.65 on MPLS March, 6.07 on March corn and 13.55 on March soybeans


With a week left or 4 trading days MR Vegas will need to make some decisions rather soon.  As right now he owns 70 contracts of the 6.20-6.70 call spread; that spread is worth about 30 cents and 30 cents one 70 contracts is about 105,000; if this play is against 50,000 of his 100,000 bushels he is up roughly $105,000 or 2.10 ish a bushel.

On his beans it is closer to 2.30 a bushel.

Now it will decision time; will he let greed get to him and hold out for even more?  After all 8.00 plus on corn isn't too bad.........what can he really hope for?  I guess this next week will tell the story; does he shift towards making sales and decisions that make sense or does fear and greed end up taking a good trade bad?

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