Wheat ETF...WEAT Bought then did a covered call

I've had some money sitting around...Not knowing where to put it for income.

I put in an offer last night for 300 shares of WEAT at $9.95...I picked it up this morning at $9.89.

I then did a covered call for the Oct 22 $12. I got $1.65 for the 3 options...$495. minus Schwab fees.

It's boring, but with the war not ending quickly, I thought I'd do this small move while we wait for a stable market in the world for wheat. Just me...

 

Cool.

I don't know WEAT well, but for anyone else thinking about something similar, don't forget to have a look at the term structure of the futures and the contract specs of WEAT, in addition to your forecasts on the spot.

https://teucrium.com/holdings/weat

It seems WEAT mostly consists of Jul - Dec futures at the moment and right now the futures curve from Jul 2022 to Dec 2023 is in contango.

Not sure if I would do it myself, but I like the trade. Thanks for sharing.

 

Weat is a slow mover but up significantly since mid 2021
Was trading mid single digits

 

I know it's not much...But the Ukraine is the 9th largest wheat producing country in the world. I wonder how many land mines will end up there? Will the port in Odessa be of use or will it be bombed to nothing. Are Russian reserve soldiers involved with the winter wheat harvest...Will Russia be ready for planting in the spring?? And where will Russia sell their wheat?? Not being funny...I really feel for these people. Just trying to be realistic...

 

wheat futures was on the uptrend for many months.

its up movement accelerated on 22Feb 2022.

on 8 Mar 2022, the price collapsed massively by 25%.

this is quite a lousy etf
to buy and do a covered call.

There are books teaching you how to better select stocks / etf
for such a strategy.

No matter much much spare cash you have and how bored you are,
you must aim for a good win or success rate.
Go get a good screener so that your win or success rate will be ~60%.

 

Wheat futures show forward month being lower.

 

I sold some puts when it was over 11.5 or so

 

Wall Street Journal story...The port of Odessa may be key.

If you can't read it...You can watch the video I believe.

https://www.wsj.com/articles/russia-ukraine-war-threatens-wheat-supply-jolts-prices-11647115099

 

And of course...Odessa gets bombed today (finally). Not a war profiteer...Was just wondering when Russia would bomb.