S&P Short Term Premium Play

Spring is here, at least according to the calendar. Here in Chicago we experienced temperatures above 60 F on Tuesday. On Wednesday the forecasts told us to expect snow within the next 24 hours. The weather trends as about as consistently as the markets have lately.

The S&P is almost to the level where we saw it close for 2015. The index is up over 12% since putting in a low for the year on February 11th.  Wednesday saw the index close lower for the first time I n six sessions. The previous run up was only the second time this year we saw the market close higher for five consecutive sessions. The market may have a slightly bullish tilt, but trends have been short lived, especially on the way up.

Looking at a short term premium play I like selling a strangle. I looking to sell the April Week 1 E-Mini S&P 500 1990-2050 strangle at 10 points ($500.00) or better. Buy selling the 1990 put and the 2050 call, we are looking for the market to trade between the two strikes. The April Week 1 options expire on 4/8/16, so we have just a over a week until expiration. I am setting an initial target exit at 2 points. If volatility kicks in over the next few sessions, I would try to limit a loss to 5 points.

For those interested Walsh Trading is holding our weekly grain webinar Thursday March 24th at 3:00 PM Central time hosted by our Senior Grain analyst Tim Hannagan. Tim has been ranked #1 by Reuters and Bloomberg in 2011 and 2012 for his most accurate end of year price predictions for soybeans and corn. Registration is free and if you cannot attend live, a recording will be sent to your email upon signup.

John Weyer

Director of Commercial Hedging

Walsh Trading Inc.,


888 391 7894


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