This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook, published on December 14, 2012.
March / May SOYBEAN spread
The fundamentals for SOYBEANS look strong. With the January contract 2 weeks from expiring, I look to the March contract. If you look at the chart below, you will see we have had a tremendous pullback in the March versus May spread.
This is what I would like to take advantage of. With the cash market and demand both starting to get fired up, I will be putting this spread on tomorrow morning, but I wanted you to see it tonight so you can analyze further if need be.
BUYING the spread at 17 cents
- Buying the March contract
- Selling the May contract
—Risk will be the 6 cent level, last tested in June (11 cents total) …$550.00
—OBJ will be the 47 cent level, last traded in early November (30 cents total) …$1,500.00
Initial margin for this spread is $540.00 per spread
Have a look:
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