duc's Commodity Trading Thread

[ducati916]

CORN:
Long 20 Calls
March Expiry (58 days)
Strike @ $380 at $7.125
Short 11 futures @ $380
IV @ 25%

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duc

 

[ducati916]

Just an update on TSLA.



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duc

 

[ducati916]

Close the TSLA trade.

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duc

 

[ducati916]

So reasons for closing the trade:

(a) The projected volatility had dropped far below that forecast [guessed]. This meant that the Options were falling faster than they were projected to. This would likely be a problem if the stock rallied. The stock [profits] would erode at delta 100%, while the OTM option would not regain its value as quickly. The projected IV was 85%. Actual IV [today] 67%. This is a big gap.

(b) There was a profit available, after a short holding period.

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duc

 

[ducati916]

Sold Calls @ $26 loss [-$4,974]
Stock closed @ $282.63 profit $7,857.60

Net profit [no comms.] $2,883.60

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duc

 

[ducati916]

Looks like a SHORT in WTI is setting up.

I may not get the trade on, off to wage slavery today. I'll have a look at it later tonight to see if there is still a possible entry.

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duc

 

[ducati916]

Looks like a SHORT in WTI is setting up.

I may not get the trade on, off to wage slavery today. I'll have a look at it later tonight to see if there is still a possible entry.

jog on
duc

Well never got the trade on.

Looking at oil today [Monday] I'm bullish and will put on a LONG position tonight.

My concern really is around position size, as I think it could be a volatile ride. So I'll look at phasing into the position. I'll buy more if price falls on lower timeframe charts.

The 'buy' signal is the weekly, the position will be managed on a daily, but buy/sells entered on the hourly.

So the core position of 'X' contracts is managed with a rolling position. Which means the total number of contracts will vary hour-to-hour, but the core position is static, unless the overall trade signal to exit is triggered.

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duc

 

[ducati916]

Wheat: added to position.

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duc

 

[ducati916]

Oil prices gained roughly 18 percent in January, the largest gain for that month of the year on record. “A break through $55 in WTI and $65 in Brent would be a very bullish signal for these and could be the catalyst for more significant upside, with oil having stabilised over the last few weeks following the post-Christmas bounce,” Craig Erlam, senior market analyst at brokerage OANDA, wrote in a briefing. Prices lost ground on Thursday, but there are plenty of bullish landmines lurking in the market, ranging from Venezuela and Iran outages, OPEC+ cuts, and slowing U.S. shale growth.

U.S. considers SPR release. The U.S. government is considering a release of oil from the strategic petroleum reserve (SPR), timed with potential outages from Venezuela. Venezuela has exported roughly 500,000 bpd to the U.S., and because of American sanctions, those volumes are now in jeopardy. The only problem is that the SPR does not contain heavy crude. Already the market for heavy oil is tight while that for lighter oil is much looser.

U.S. refiners looking for alternatives to Venezuela. U.S. refiners that import heavy oil from Venezuela are now looking for alternatives. Canada and Mexico have heavy oil, but have little scope to increase supply. “The region with the biggest shortfall of Venezuelan crudes, either through sanctions or inadvertently through further production declines is the U.S.,” said Michael Tran, commodity strategist at RBC Capital Markets, in a note. U.S. domestic medium and heavy sour grades, including Mars Sour, have seen their prices jump. “It’s nuts. Everything with sulfur in it is getting bid,” one U.S. crude trader told Reuters, referring to sour oil that is typically less desired. Valero (NYSE: VLO), Chevron (NYSE: CVX), and of course, Citgo, are the largest importers of Venezuelan oil.

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duc

 

[ducati916]

So an interesting position in Corn is setting up.



The context is that only circa 70% of the US corn crop has been planted. It is now too late in the day to actually plant the remaining 30 million acres. My guess would be the prevailing low prices from 2014 dissuaded additional planting.

I'm not sure where else in the world corn is also planted [in sufficient quantity] and whether that picks up the US shortfall, or has contributed in the past to lower prices as a glut on the market.

Possible trading opportunity.

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duc

 

[ducati916]

Not really a commodities trade:

BABA

Long [buy] the $175 strike [June 2020] PUT 10 contracts
Long BABA stock 500 shares

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duc

 

[ducati916]

Close the position for a profit.

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duc

 

[ducati916]

On a chart basis, I'm starting to like Oil for a long.

Long $52.71

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duc

 

[barney]

On a chart basis, I'm starting to like Oil for a long.

Long $52.71 jog on duc

All in on that Duc? …. or looking to accumulate? Thursday did look like a rejection of that $51 area … again!

 

[ducati916]

All in on that Duc? …. or looking to accumulate? Thursday did look like a rejection of that $51 area … again!

Just an initial position, will look to build. I'm in USOU, which is a x3 leverage oil ETF. Will update as it moves.

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duc

 

[barney]

Just an initial position, will look to build. I'm in USOU, which is a x3 leverage oil ETF. Will update as it moves.

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duc

Cheers.

 

[ducati916]

Added UGAZ at $12.59

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duc

 

[ducati916]

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duc

 

[ducati916]

Natural Gas (UGAZ) showing a nice divergence in technical indicators. Looking for a bit of a move higher. Fundamentally, inventories are above their 5 yr average, so any move might be short lived.

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duc

 

[ducati916]

So, on the news...

Today's biggest action in energy commodities is in natural gas (UNG +1.3%), with December gas settling +1.7% to $2.32/MMBtu, on forecasts of lower than normal temperatures in parts of the central and western U.S.

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duc