I wanted to give an update on the basket of spreads we are holding from our Market Action Alerts. Overall we are looking good on the positions. Below you will see updated charts showing the spread entry, risk and price action. If you have any questions on these trades, please feel free to reach out to me. Stay tuned for more spread opportunities in the future.
Live Cattle Spread: Short Feb – Long June @ +9.15 (11-11-15)
This spread is continuing to trend in our favor. We had a risk off opportunity for those holding multiple contracts that were filled @-6.60. We are still trending toward our target prices below -5.00. Today we had a low @ -6.10 ($1220 per spread before fees). Last @ 6.375
WTI vs Brent Crude Spread: Long Jan WTI – Short Jan Brent Crude @ -2.70 (11-20-15)
We have seen crude prices continue the downward trend the last few weeks, but we have been trading sideways in the WTI vs Brent Trade. After we were filled on this trade we had a bit of downward pressure but since then we have traded between -3.00 and -2.50. So slightly against us to slightly positive. The January contracts will be rolling soon 12/16/15 for Brent, so we need to start thinking of rolling or exiting the trade. Depending on your entry you can scratch the trade or look for the high end range around -2.50 Last traded @ -2.98 (-$280 per spread before fees).
Feeder Cattle Spread: Short March – Long May @ -1.40 (12-2-15)
We have been in this trade for a week now. The trade went against for about a session or 2 once we got in but not by much. Since then we have started trending back toward the lows we wanted. This spread has last traded @ -2.45 (+$525 per spread before fees).
Heating Oil Spread: Short Jan – Long June @ -0.0880 (12-3-15)
This seasonal spread had some strong momentum the day I was looking to get involved, so we wanted to enter this trade on a retracement rather than just a seasonal window. The price came back and triggered our entry and has continued to trend back in favor. We are targeting the -.1200 price level that I am wanting hit. Depending on your entry price how many you are holding, I would suggest looking to start working or thinking of taking profits on this trade. Last @ -.1115 (+$987 per spread before fees)
Beans vs Wheat Spread: Long March Beans – Short March Wheat @ 4.07 (12-7-15)
Our more recent spread is playing is arbing the price difference between March Beans and March Wheat. This contract went on a strong run breaking through $4 and hitting almost $4.30. The goal was to enter on a short retracement with us looking to trend to the $5.00 historical prices. Since our entry it appears we have seen the spread trade back below $4 and last traded @ 3.90 so we are down roughly 17 cents ($850 per spread before fees) With price action the last couple days preparing for today’s WASDE and it not revealing much (non-event) I look for this spread to track back higher.
Risk Disclosure
STOP ORDERS DO NOT NECESSARILY LIMIT YOUR LOSS TO THE STOP PRICE BECAUSE STOP ORDERS, IF THE PRICE IS HIT, BECOME MARKET ORDERS AND, DEPENDING ON MARKET CONDITIONS, THE ACTUAL FILL PRICE CAN BE DIFFERENT FROM THE STOP PRICE. IF A MARKET REACHED ITS DAILY PRICE FLUCTUATION LIMIT, A "LIMIT MOVE", IT MAY BE IMPOSSIBLE TO EXECUTE A STOP LOSS ORDER.
EXAMPLES OF SEASONAL PRICE MOVES OR EXTREME MARKET CONDITIONS ARE NOT MEANT TO IMPLY THAT SUCH MOVES OR CONDITIONS ARE COMMON OCCURRENCES OR LIKELY TO OCCUR.
STRATEGIES USING COMBINATIONS OF POSITIONS, SUCH AS SPREAD AND STRADDLE POSITIONS MAY BE AS RISKY AS TAKING A SIMPLE LONG OR SHORT POSITION.
EXAMPLES OF HISTORIC PRICE MOVES OR EXTREME MARKET CONDITIONS ARE NOT MEANT TO IMPLY THAT SUCH MOVES OR CONDITIONS ARE COMMON OCCURRENCES OR ARE LIKELY TO OCCUR.
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.
