Agriculture News, Markets, Weather, Ag Talk, Farm Machinery | Agriculture.com
Reply
Senior Contributor
ShelladyOptions
Posts: 923
Registered: ‎05-03-2010
0

OptionEye....Mar 21st

Good morning.

 

Corn and wheat lower. Beans higher.

 

Interest rates really haven't moved since yesterday morning. Big Ben didn't shock us with anything new. The pump continues and equities will like it. I am not sure about the trickle down wealth effect from stocks but I am also not sure he has any other arrows in his quiver.

 

Cyprus still on the front page. The biggest risk I see is that they drop out of the EU. I think it is in Russia's best interest to keep them in but at what cost?

 

There were some disappointing economic numbers out of Europe this morning that will also cast a long pall over things on the open.

 

Good luck and great trading.

Advisor
time:thetippingpoint
Posts: 571
Registered: ‎05-20-2010
0

Re: OptionEye....Mar 21st

So, Scott, instead of telling us things that you know absolutely nothing about (Cyprus for example), how about sharing some option strategies to deal with things.

 

Like which SX call would you sell, and which SX put would you buy given the current vols/deltas/etc etc. Lots of rev per acre on the table and very limited hedges in place on a $40 Bil bean crop and a $80 Bil corn crop.

 

You are obviously great at your day job, leave the reporting to Marketeye, and share some of the good juice with us.

 

TIA

 

 

Veteran Advisor
c-x-1
Posts: 3,257
Registered: ‎06-26-2012
0

Re: OptionEye....Mar 21st

IMTO SX has bottomed for now. selling calls might create an unneccesary exposure? I would @ least wait for a test of 1400

 

......doubt Scott will respond.

Senior Contributor
ShelladyOptions
Posts: 923
Registered: ‎05-03-2010

Re: OptionEye....Mar 21st

I actually have a lot to say about Cyprus and Europe and happen to know a little bit about it.

 

I lived in Europe for 11 years and hold a European passport. My only child was born there and I have contributed to the the National Pension Plan for every year I lived there as well as paying taxes in Europe while concurrently paying them in the States as a citizen of both during my entire stay. I bought and sold a few houses, owned a couple of cars, drove on the other side of the road, which believe it or not is more popular around the world than the side we drive on, and hold a European drivers license. I feel pretty confident about my ability to comment on Cyprus and Europe.   

 

I just don't go into great detail because a lot of folks on this site might not really be that interested but the Eurozone definitely has an effect on our economy and marketing plans here in the states.

 

Currently there is roughly a .50% vol skew every .50 cents to the upside in Nov and the puts look to have a small negative skew but nothing drastic. Bias is still bullish hence the risk reversal (collar or combo - they call the strategy different names around the world)  vol levels. Depending on your personal situations and breakevens, the 1500 calls are currently worth roughly 19 cents with Nov beans at 14.44+. They could be sold and purchase of the 11.00 puts for 17 cents would take in a credit of 2 cents and covering your downside at 11.00 and selling short at 15.00 to the upside all the while taking in 2 cents for the trade.

 

There may be a small vega to this trade so volatility swings may impact your margin requirement regardless of the underlying movement. And of course, we have an acreage report next Thursday that could impact your position significantly.