Matt McKinney's Options & Futures Trading Strategies Blog

Direct: 312-277-0115  |  mmckinney@zaner.com

Matt Mckinney's Options & Futures Trading Strategies Blog is a blog dedicated to bringing updates, news and commentary on futures and commdity markets.

This blog is brought to you by Zaner Group, one of America's oldest family-owned and operated futures and forex brokers.  Zaner provides a wide range of services from research and recommendations to the execution of all your futures needs.

We invite you to join the thousands of other Zaner clients that have enjoyed our services.  Click here to learn how to open an account with Zaner.

  Subscribe to my FREE Options Play Update Newsletter

Futures, options and forex trading is speculative in nature and involves substantial risk of loss.  These recommendations are a solicitation for entering into derivatives transactions.  All known news and events have already been factored into the price of the underlying derivatives discussed.  From time to time persons affiliated with Zaner, or its associated companies, may have positions in recommended and other derivatives.


Options Play: Soybean Demand Remains Strong

Posted on 5/23/2016 8:17:30 AM by: Matt McKinney, Market Strategist @ Zaner. 312-277-0115.

Direct-312-277-0115, http://www.mmckinneyfutures.com/

TRADING COMMODITY FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND MAY NOT BE SUITABLE FOR ALL INVESTORS. YOU SHOULD CAREFULLY CONSIDER WHETHER TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES, KNOWLEDGE AND FINANCIAL RESOURCES.

 

 

 

Options Play: Soybean Demand Remains Strong

 

The Demand For Soybeans From China Remains Extremely Bullish For Futures Prices Overall.

 

Fundamentally, there is a combination of bullish and bearish forces tugging at the Soybean market. On the bullish South American note, Soybean supplies are shrinking and there is talk that supplies will remain tight throughout the remainder of the year. In fact, according to Hightower reports, the Argentinian Soybean crop is only 61% harvested compared to 88% last year at this time and there is major quality concerns for that crop. Another bullish force pushing prices is the demand out of China which is robust.

On the bearish side of things is the situation here is the U.S. Soybeans for the most part are in the ground and the weather outlook is just suberb for growing. Although transitioning from El Nino to La Nina, weather forecasts have the potential to be the wildcard.

 

Technically, I have added my favorite technical indicators to the charts below. I have coined them the "10/20/50/BB Trend Finder". They are the 10 (red line), 20 (green line), and the 50 (blue line)period Simple Moving Averages or SMAs. I have also added Bollinger Bands or BBs (light blue shaded area) and Candlesticks (the red and green bars with the candlestick wicks, and on the daily chart below each bar represents one day of trading). These few technical indicators can tell me many, many different characteristics about the market at a quick glance so I have them saved on my charts in MARKETHEAD, so they can populate on any chart I choose at the click of a mouse.

On the daily chart below, the market has tested and traded below the support of the 10 day SMA for the last three sessions.Next could be the support of the 20 day SMA.

 

The Soybean market is in what I refer to as a PRINCIPAL TREND higher which is the strongest form of an upward trend that my technicals can show me. However, the market is oversold on the weekly chart below and could be due for a correction down to the first area of support which is the 10 period SMA.

 

The market is currently overbought and in the process of changing trend on the monthly chart below. This is indicated to me by the fact that the 10 period and the 20 period SMAs are changing from pointing downward to curling sideways.

 

 

I figured all this out by putting my "10/20/50/BB Trend Finder" on the charts above and applying these indicators to the charts at the click of a mouse which I found at: http://www.markethead.com/2.0/free_trial.asp?ap=mmckinne, which is a web application that we have developed for our clients called MARKETHEAD where I get about 70-80% of all my research from. That means I get both technical and fundamental research from this web app and I am a veteran series 3 Broker of 17 years. So if I'm using it then maybe my readers should check it out.Yes?

 

 

Options Play:

One strategy that could be used here is to buy limited risk calls or bull call spreads and in a three to one ratio a put. I have unofficially named this strategy a "long straddle" or a"ratio spread"

For exact details on this strategy, months, expiration dates, strike prices, and number of positions feel free to contact me at 312-277-0115 ormmckinney@zaner.com.

 

CME Options On Futures: The Basics: http://www.zaner.com/offers/?page=9&ap=mmckinne

 

FREE QUOTE- "We should not look back unless it is to derive useful lessons from past errors, and for the purpose of profiting by dearly bought experience." -George Washington

 

 

 

 

FUTURES, OPTIONS AND FOREX TRADING IS SPECULATIVE IN NATURE AND INVOLVES SUBSTANTIAL RISK OF LOSS. THESE RECOMMENDATIONS ARE A SOLICITATION FOR ENTERING INTO DERIVATIVES TRANSACTIONS. ALL KNOWN NEWS AND EVENTS HAVE ALREADY BEEN FACTORED INTO THE PRICE OF THE UNDERLYING DERIVATIVES DISCUSSED. FROM TIME TO TIME PERSONS AFFILIATED WITH ZANER, OR ITS ASSOCIATED COMPANIES, MAY HAVE POSITIONS IN RECOMMENDED AND OTHER DERIVATIVES.

 

FOR CUSTOMERS TRADING OPTIONS, THESE FUTURES CHARTS ARE PRESENTED FOR INFORMATIONAL PURPOSES ONLY. THEY ARE INTENDED TO SHOW HOW INVESTING IN OPTIONS CAN DEPEND ON THE UNDERDLYING FUTURES PRICES; SPECIFICALLY, WHETHER OR NOT AN OPTION PURCHASER IS BUYING AN IN-THE-MONEY, AT-THE-MONEY, OR OUT-OF-THE MONEY OPTION. FURTHERMORE, THE PURCHASER WILL BE ABLE TO DETERMINE WHETHER OR NOT TO EXERCISE HIS RIGHT ON AN OPTION DEPENDING ON HOW THE OPTION'S STICKE PRICE COMPARES TO THE UNDERLYING FUTURE'S PRICE. THE FUTURES CHARTS ARE NOT INTENDED TO IMPLY THAT OPTION PRICES MOVE IN TANDEM WITH FUTURES PRICES. IN FACT OPTIONS PRICES MAY ONLY MOVE A LITTLE.

THE LIMITED RISK CHARACTERISTIC OF OPTIONS REFERS TO LONG OPTIONS ONLY AND REFERS TO THE AMOUNT OF THE LOSS, WHICH IS DEFINED AS THE PREMIUM PAID ON THE OPTION(S) PLUS FEES.


Older posts

Matt's Links

 

Recent Posts