This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook, published on August 2, 2013.
October SUGAR: 3 WAYS!
I will be attempting to SELL the OCTOBER SUGAR contract at this level. If you would like to get involved and follow along with me, below are 3 different ways with which to do so.
I am aware that different traders have different approaches and levels of comfort, so let’s cover all 3. Each type of trade has its own pros and cons and each will provide the possibility of different risks versus rewards. That being said, no matter which style you choose to go long this market, in my opinion, this set-up looks great in a market that has found some recent resistance all along this trend line.
***This is a rather longer email than usual. Make sure to scroll down to see ALL 3 trade ideas!***
#1) An outright future contract
SELLING the October contract at 16.80 (day order)
- Risk will be the 17.30 level …($560.00)
- OBJ will be the 15.80 level …$1,120.00
Have a look:
#2 A futures spread:
I will be trading 2 of these
BUYING 2 of the May 2014 contract
SELLING 2 of the October 2013 contract
Premium of -40 points to the BUY (day order)
- Risk will be the -25 level …($560.00)
- OBJ will be the -80 level …$1,120.00
Initial margin for the spread is roughly $500.00 per
Have a look:
#3) PUT spread:
I will be tracking the 16.75 / 16.00 PUT spread.
BUYING the October 16.75 PUT
SELLING the October 16.00 PUT
43 days until expiration
Premium of 28 points (or $313.60) to the BUY side (day order)
Risk will be the cost of the spread, $313.60 (plus all trading fees)
Maximum profit possibilty if we expire below 16.00 at expiration is $840.00 (minus all trading fees)
Learn Futures Technical Analysis with The Market's Spine
Give Your Trading the Backbone it Needs to Succeed, The Market’s Spine is a 34-page futures technical analysis guide that details how to read the backbone of recent market activity, explains a handful of indicators that are well known to institutional and fund traders, and more. Expand your futures technical analysis knowledge here.
THE RISK OF LOSS IN TRADING COMMODITY FUTURES AND OPTIONS CONTRACTS CAN BE SUBSTANTIAL. THERE IS A HIGH DEGREE OF LEVERAGE IN FUTURES TRADING BECAUSE OF SMALL MARGIN REQUIREMENTS. THIS LEVERAGE CAN WORK AGAINST YOU AS WELL AS FOR YOU AND CAN LEAD TO LARGE LOSSES AS WELL AS LARGE GAINS.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.