The #1 piece of advice I give to new brokers and new traders is “Don’t Spec Errors. “ In other words, if you entered a position due to an execution error, just close the position and move on. Do not treat the error as a speculative trade.
When stops are triggered on the CME Globex and ICE systems, they do not become market orders. For US futures electronic markets, Stop Orders are really “Stop with Protection Orders.”
As a reader of TWIG, I hope you have come to understand my major objective to inspire ideas so you can hedge or trade these grains markets on your terms. Lately, I have been asked by producers why it would make sense to re-own. Today, I am going to step out of my bear costume and put on my bulls jersey. Maybe I can inspire an idea or two to get you involved.
Understanding how futures spreads are priced is the first step to trading this strategy. Learn how to price the spread and what a futures spread looks like on a chart.
As many basketball fans may know, the Miami Heat recently had a 27 game winning streak, which was the 2nd longest winning streak in NBA history. It ended on Wednesday, March 27, 2013 when they visited my Chicago Bulls in a game that a lot of folks thought the Heat should have won easily. The… Read More.
In a previous article, I explained commodity option expiration, exercising, and assignment. I noted a long (purchased) option position (call or put) has the right to exercise the contract. To make an informed decision, I will explain the result of exercising an option contract. A commodity option contract is a decaying asset that will expire…. Read More.
It is essential to understand option expiration, exercising, and assignment as a commodity option trader. Know these principles, whether purchasing outright calls or puts, selling or “writing” option contracts, or using complex option spread strategies. Not only will you be better equipped for such events, but also having this acumen could potentially improve your trading… Read More.
This is a sample entry from Craig Turner’s weekly market analysis newsletter, Turner’s Take, published on January 8, 2013. On Friday, January 11th at 11:00 am central time, the USDA will release the January WASDE, Annual Crop Production for Corn & Soybeans, December 2012 stocks, and Winter Wheat seedings. The January 11th USDA report is… Read More.
I love spreading options. They allow me to get involved in certain markets that my account size may prevent me from trading if I were using futures or long only options. I can design a trade specific to my feelings on market direction and time. I can combine calls and/or puts to make my trade… Read More.
If you are a “writer” of commodity options, you inherently have exposed and unlimited risk. However, it’s this risk potential that provides the capacity to reap rewards. Therefore, a savvy commodity option writer understands that managing risk is more important than reaping rewards. In a previous article, I detailed a strategy to execute a strangle… Read More.