OPTION TRADE OF THE DAY!
June Hogs- We are seeing a seasonal set up as the market appears to be putting in a bottom. Buy the June 74/80 Bull Call Spread; sell the June 70 put as your naked leg. The trade is running about $250 per spread which will be your risk as long as the market stays above 70, under 70 you have unlimited risk. The profit potential is limited to 6 cents or $2400 before costs. Based upon a cost of $250 you would have an intrinsic break even of 74.62.
August Live Cattle are entering into a seasonally stronger time frame as well and we like buying the 86/92 Bull Call Spread with a short 80 as our naked leg. This spread is running under $200 which would be the risk with the market trading above 80 but below 86, under 80 you have unlimited risk. The profit potential is limited to 6 cents or $2400 before cost considerations.