Matt McKinney's Options & Futures Trading Strategies Blog

Direct: 312-277-0115  |  mmckinney@zaner.com

Matt Mckinney's Options & Futures Trading Strategies Blog is a blog dedicated to bringing updates, news and commentary on futures and commdity markets.

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Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  These recommendations are a solicitation for entering into derivatives transactions.  All known news and events have already been factored into the price of the underlying derivatives discussed.  From time to time persons affiliated with Zaner, or its associated companies, may have positions in recommended and other derivatives.


Options Play: Trend Still Up In Corn, Soybeans

Posted on 4/26/2016 6:38:45 AM by: Matt McKinney, Market Strategist @ Zaner. 312-277-0115.

Direct-312-277-0115, http://www.mmckinneyfutures.com/

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.

 

 

 

Options Play: Trend Still Up In Corn, Soybeans

After an impressive bull move and subsequent profit taking, the trend in the row crops is still up.

 

 

Fundamentally, expectations for possible record yields this year for the Corn and the Soybeans could be priced in. How often are expectations like these met in the markets? I would expect some erratic weather patterns to have an impact on prices as we transition from El Nina to La Nina this year.

So as we move into the completion of the planting season weather will be in the forefront. I would expect the Soybeans and the Corn to bounce on certain weather patterns and concerns. This could make for fun and exciting markets this spring. Unlike the past winter and fall that had Corn and Soybeans range bound and predictable.

 

 Technically, I have added my favorite technical indicators to the daily charts below. I have coined them the "10/20/50/BB Trend Finder". They are the 10 (red line), 20 (green line), and the 50 (blue line) day Simple Moving Averages or SMA's. I have also added Bollinger Bands or BB's (light blue shaded area) and Candlesticks (the red and green bars with the candle stick wicks, and on this daily chart each bar represents one day of trading). These few technical indicators can tell me many, many different characteristics about the market at a quick glance so I have them saved on my charts in MARKETHEAD, so they can populate on any chart I choose at the click of a mouse.

The Soybean market has gone parabolic and is in what I refer to as a PRINCIPAL TREND higher which is the strongest form of an upward trend that my technicals can show me. This PRINCIPAL TREND up occurs when the 10 day SMA crosses up and over the 20 day SMA and the market trades above the 10 day SMA using it as support. 

 

 

Technically, after the Corn market went parabolic or basically straight up, it then pulled backed to the support of the 20 day SMA. as long as the support of the 20 day SMA holds and continues to point on an upward angle I will have the Corn market in an upward trend.

 

 

 

I figured all this out by putting my "10/20/50/BB Trend Finder" on the charts above and applying these indicators to the charts at the click of a mouse which I found at: http://www.markethead.com/2.0/free_trial.asp?ap=mmckinne , which is a web application that we have developed for our clients called MARKETHEAD where I get about 70-80% of all my research from. That means I get both technical and fundamental research from this web app and I am a veteran series 3 Broker of 17 years. So if I'm using it then maybe my readers should check it out. Yes? 

 

Options Play:

One strategy that could be used here is to buy limited risk calls or bull call spreads and in a three to one ratio a put. I have unofficially named this strategy a "long straddle" or a "ratio spread"

For exact details on this strategy, months, expiration dates, strike prices, and number of positions feel free to contact me at 312-277-0115 or mmckinney@zaner.com .

 

CME Options On Futures: The Basics: http://www.zaner.com/offers/?page=9&ap=mmckinne

 

FREE QUOTE- "We should not look back unless it is to derive useful lessons from past errors, and for the purpose of profiting by dearly bought experience." -George Washington

 

 

 

 

FUTURES, OPTIONS AND FOREX TRADING IS SPECULATIVE IN NATURE AND INVOLVES SUBSTANTIAL RISK OF LOSS. THESE RECOMMENDATIONS ARE A SOLICITATION FOR ENTERING INTO DERIVATIVES TRANSACTIONS. ALL KNOWN NEWS AND EVENTS HAVE ALREADY BEEN FACTORED INTO THE PRICE OF THE UNDERLYING DERIVATIVES DISCUSSED. FROM TIME TO TIME PERSONS AFFILIATED WITH ZANER, OR ITS ASSOCIATED COMPANIES, MAY HAVE POSITIONS IN RECOMMENDED AND OTHER DERIVATIVES.

 

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERDLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STICKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT OPTIONS PRICES MAY ONLY MOVE A LITTLE.

THE LIMITED RISK CHARACTERISTIC OF OPTIONS REFERS TO LONG OPTIONS ONLY AND REFERS TO THE AMOUNT OF THE LOSS, WHICH IS DEFINED AS THE PREMIUM PAID ON THE OPTION(S) PLUS FEES.


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