I would say that the Dec contract would be sold between 5/15 and 7/4 typically with a lot of downside pressure after 7/4
i'm going to hold long term. i'm pretty convinced on the long term fundamentals of this market. I figure I can withstand a 50% drawdown on initial investment and average down at 7 cents a pound if we ever trade that low. I like the idea of buying the deferred months that trade at a discount to spot because there is, or I perceive, a positive carry or time value in the trade. I would think that holding everything else constant, the deferred would accrete up to the value of the spot or front delivery months. i was also thinking of buying a big chunk of slightly out of the money call spreads for 15-20 ticks. Like 50 18/18.5 bull call spreads . That way if I'm in the money on expiry I have a .5 gain on 50 lots which would be quite nice. Otherwise I lose my premium.... which wouldn't be so nice. So I'm debating if I should do that strategy once we breakout above previous highs, or do it now that we are in a corrective mood.
If u are long term bullish, why dont you sell puts serially? THe skew is higher in the puts by at leat 1-3 ticks aver ATM. Kinda like Ansbacher. might get good returns
When you say 50% drawdown, you don't mean 50% of your account I hope. Also, the bull call spread is not a good idea in my view. You will be bleeding the account litte by little until the move occurs.
Changed my strategy and bought some 15/15.5 oct 07 call spreads in sugar for 23 ticks and some 16/16.5 spreads for 18 ticks. I'm interested in being able to buy in and ATM call spreads for a discount. One could even buy call spreads in the money by 2 cents at 34 cents or so. Anyway at least this way though I'm not buying the cheapest call spread out there I'm buying something in the money that should widen out to 50 ticks by maturity. Thinking of: Selling a May put here as I think the gap filling we did 17-17.02 is technically positive . Buying the May/July spread at around 30-35 ticks. Any views?