This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook, published on September 19, 2012.
March 2013 / July 2013 CORN spread
I am looking to get long the March 2013 CORN at this point. With the volatility that has been present as of late, I will use a spread against July 2013. We have had a recent price break and I believe this is a great spot to get involved. Harvest pressure, lack of new buying interest and lack of demand issues have brought 2012 crop down by roughly $1.00 in the past month. As these issues are being dealt with the December futures, 2013 is a brand new animal.
- BUYING the March contract
- SELLING the July contract
Premium of 10 cents to the BUY side
- Risk would be the 0 level (parity) … ($500.00)
- OBJ would be the 30 cent level … $1,000.00
Initial margin for this spread is roughly $1776.00 and the maintenance is $1575.00
Have a look:
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