Wheat

Discussion in 'Ag Futures' started by redbull13, Jan 16, 2006.

  1. Hey guys,
    Once again I'd like some opinions. I plan on buying some WH puts - thinking 305. This trade, like most of mine, is based on TA. However, any fundamentalists that have something to say, please do. Always like finding new information.

    Jimmy
     
  2. Looks to me like it's forming a symmetric triangle. I'd be more inclined to buy a straddle at the apex of the triangle (335) but hey, that's just my opinion. This play assumes wheat will either break sharply upward, OR break sharply downward, from 335. Well duh Goober, that's what a straddle NEEDS to be profitable. Der.
     
  3. I am not familiar with options strategies such as a straddle. I only know the basics...however, if you wouldn't mind telling me what a straddle is and how it would work in this case, that would be greatly appreciated.
     
  4. bolter

    bolter

    With the commercials so heavily net long I would hate to bet against them over the long term. However, the last half of Jan is traditionally a very weak period for Wheat so you have the seasonals working for you.

    I've been short wheat since early 2004 - but I'm getting nervous.

    Good luck.

    [​IMG]
     
  5. Speaking of the commercials, check out www.chart-ex.com. It shows volume at price for many different commodities, and it has a feature that shows where the locals, firms, and funds are buying at. Anyways, how long have the commericals been long for? What price range?
     
  6. bolter

    bolter

    TF,

    Thanks - however I think that link should be:
    http://www.chart-ex.com/chart-index.jsp

    What feature tells you the levels where the various parties are buying/selling. I can't find it?

    Have a look at the chart I posted - this shows the activity for the commercials over the last few years.
     
  7. Bolter,
    To view the CTI numbers you hold down shift while on a chart. When you click you will see some numbers show up under the bar (like 1:10). The first number represents the who, and the second number represents the number of contracts bought and sold. I believe 1 is locals, 2 is firms on the floor, 3 is just off-floor, and 4 is the funds.
     
  8. bolter

    bolter

    Thanks TF. I will take a look.

    All the best.
     
  9. "Buying a straddle at 335" means buying a 335 call and, simultaneously, buying a 335 put. It's a bet that price will move substantially away from 335, either higher or lower. If you don't believe that price tends to make thrusting breakouts from a symmetric triangle, don't put on this trade!
     
  10. Ok, I remember hearing about that somewhere. An interesting strategy, but I think I'm going to do a basic options trade here. Thanks for the info though, defintely something I could use in the future.

    Jimmy
     
    #10     Jan 17, 2006