Below is update for our grain market specialist Neutral Nick; who trys to stay hedged or sold 100,000 bushels worth of beans, corn, and wheat.
Nick the mock grain marketing character like many real world producers does have other stuff to do other then simply trying to out guess what the funds might do or not to do our market place on any given day.
He hasn't found the solution to knowing when and what the next black swan event will be or happen; but despite his many errors he has a good chance of having made good money in a very unique style of hedging grain/commodities. The style comes from the delta neutral concept and the fact that he always thought it made more sense to sell insurance versus spending money buying it.
Our markets have been a little up and down lately and Nick has really had to add plenty of positions which are not free of commissions to try and keep his ship floating. With the pressure seen last week and then the limit to nearly limit down moves seen yesterday his trade volume is simply increasing. So with his style he once again this week he found himself behind the eight ball in the chase for a return on his investment that was high enough to allow him to sleep like a baby. (Despite how some would view his risk-return ratio. )He might argue that threw mathamatics he is simpling trying to play the grain marketing and commoditiy trading game via futures and options as the house rather then the average joe walking down the street. Or as the insurance seller not the buyer.
Either way Nick has had some serious trades lately in some price action in our grain markets that should have many producers as well as other commericials wondering what will the funds and money flow do to my markets next and how am I positioned versus the various possible what if's that could happen as we move forward.
Here is what he did on wheat today to try and accomplish delta position equal to 100,000 bushels sold (hedged).
290 trades to adjust versus 20 to be short? Ouch those fee's do add up.
Below shows July positions; on 100,000 bushels sold not a bad chart; especially if his creative juices and help raise the green line threw time.
Today's trades in corn really help show his goal and objective. Simply move the green line up as much as possible in the areas that it has the most weakness or risk exposure but try to do so without losing it all if we change directions again.
Overall Nick is nervous as he can be; but isn't that what he wanted to have happen; basically sell fear of the sky falling and then sell the fear of inflation and concept that we have to continue to get higher.
His biggest comfort level lies within the fact that he likes what his bottom dollar line or profit ends up if things expire at or near these price levels.
For those thinking of trying a style like this please talk to your broker as trading futures and options is very risky; plus past results are not a gtd of future results.
Nick the mock grain marketing character like many real world producers does have other stuff to do other then simply trying to out guess what the funds might do or not to do our market place on any given day.
He hasn't found the solution to knowing when and what the next black swan event will be or happen; but despite his many errors he has a good chance of having made good money in a very unique style of hedging grain/commodities. The style comes from the delta neutral concept and the fact that he always thought it made more sense to sell insurance versus spending money buying it.
Our markets have been a little up and down lately and Nick has really had to add plenty of positions which are not free of commissions to try and keep his ship floating. With the pressure seen last week and then the limit to nearly limit down moves seen yesterday his trade volume is simply increasing. So with his style he once again this week he found himself behind the eight ball in the chase for a return on his investment that was high enough to allow him to sleep like a baby. (Despite how some would view his risk-return ratio. )He might argue that threw mathamatics he is simpling trying to play the grain marketing and commoditiy trading game via futures and options as the house rather then the average joe walking down the street. Or as the insurance seller not the buyer.
Either way Nick has had some serious trades lately in some price action in our grain markets that should have many producers as well as other commericials wondering what will the funds and money flow do to my markets next and how am I positioned versus the various possible what if's that could happen as we move forward.
Here is what he did on wheat today to try and accomplish delta position equal to 100,000 bushels sold (hedged).
290 trades to adjust versus 20 to be short? Ouch those fee's do add up.
Below shows July positions; on 100,000 bushels sold not a bad chart; especially if his creative juices and help raise the green line threw time.
Today's trades in corn really help show his goal and objective. Simply move the green line up as much as possible in the areas that it has the most weakness or risk exposure but try to do so without losing it all if we change directions again.
Overall Nick is nervous as he can be; but isn't that what he wanted to have happen; basically sell fear of the sky falling and then sell the fear of inflation and concept that we have to continue to get higher.
His biggest comfort level lies within the fact that he likes what his bottom dollar line or profit ends up if things expire at or near these price levels.
For those thinking of trying a style like this please talk to your broker as trading futures and options is very risky; plus past results are not a gtd of future results.
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