Wednesday, November 16, 2011
Another Mock Trading Session in our Marketing Hour Round Table at MWC in Onida
Today we held another MWC Marketing Hour Round Table meeting; in which we discussed current issues, looked at various charts, talked a little on basis, and then did some mock trading.
Here is a recap of our mock trading.
First Dan was stopped out of a long KC wheat position for a small profit; as that was the only booked trade that was closed today. It leaves us with about 75k profit on our winners with about 25k losses for a net of around 50k profit since we Sept 1st.
On the futures side of things Kevin added stop for his MPLS-KC Spread; in which he is a little bit behind. I added a stop and placed an objective on my long corn while adding more length at today's close. Basically a trade that is a scale buy trade.
Dan then moved his risk on his long MPLS March wheat up to help GTD that he locks in another winner; while opening up the upside; figuring a break threw of 9.00 could quickly accelerate buying.
I then had an open order to buy MPLS at 9.00 on a buy stop; decided to place a sell at the market with a 20 cent objective and changed my buy stop to a risk and reverse against my short MPLS March at 8.90. Bottom line i remain friendly but look for the market to congest a little bit before trying to make another leg higher.
Chris then placed our first non-grain trade; he shorted crude oil at 101.69; with a risk to 103.00 and a reverse objective at 95.00.
Dan then went long corn on the march; risking to 6.42 with an objective of 6.71.
Lastly on the futures bought 1 jan bean at the close; placed another order to buy another at 11.85; with a risk of 11.79 and an objective of 12.25
On the options side of things the only adjustment made was Chris putting in an order to sell 1 MPLS March 8.50 put if we close the MPLS March Futures above 9.00; adding to his strangle that he is currently up about 2500 on.
The last trade was Jeremey purchasing an 11.50 Jan bean put and buying a 12.00 Jan bean call. My exit is next week Wed (or at least that is the exit plan). The reason for the purchase of both of these with a game plan of exiting soon; is simply to try and pick up a little increase in volatility as these options only have an implied volatility of about 14-15%; whereas the corn and wheat options seem to be 25-35%; I don't want to have the theta eat me away that is why I plan on exiting in about a week; as i have it calculated that theta is going to cost about 30-35 a day; while a 10 % spike in volatility could give me a chance to make a couple thousand and a big move either way allows gamma to help my net delta position out in a hurry.
Jordan was ill and didn't make the session; so all of his open trades are still open. Perhaps being long all of the beans made him a little ill?
Please make sure to join us next week in Onida as we have another session. With the Thanksgiving Holiday we might move it up a day; but if we do we will have plenty of text messages and emails out.
Labels: Beans, charts, Charts and Strategies, commodity price risk management tools strategies grains futures options money cash flow, crop conditions, Delta Neautral Trading, Leverage Optoins Futures, Marketing Tools, MWC Marketing Hour Round Table, opening grain comments, option selling, Price Management, USDA Crop Report Supply and Demand