Option Trades for 9-1-09

_{OPTION TRADE OF THE DAY!}

9-1

November beans are heading into harvest and with forecasters calling for a huge crop, so we expect to see prices head possibly under 8 dollars a bushel by mid October as long as the weather doesn’t do anything too whacky. We actually like two different ways to do this trade.  Doing both may not be a bad idea, if the market does go down

Trade Number One- Buy the 900/800 bear put spread with a naked 1080 call.  The risk on this trade with the market being below 1080 but above 900 is limited to the premium paid $350 plus three commissions.  The risk above 1080 is unlimited, while the profit potential is limited to $5,000 minus 350 plus the cost of three transactions.

 

Trade Number Two- Buy the 940/890 bear put spread and sell the November 1080 call as your naked leg. The risk on this trade with the market under 1080 is limited to the premium paid plus three commissions.  The risk with the market above 1080 is again unlimited.  The profit potential on this trade is limited to $2500 minus premium $300 minus three transaction costs.

_{There is a substantial risk of loss in trading futures and options.}

 

_{Past performance is not indicative of future results.}

_{The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.}

_{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 UNDERLYING 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 STRIKE}

_{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, OPTION PRICES MAY ONLY MOVE A FRACTION OF THE PRICE MOVE IN THE UNDERLYING}

_{FUTURES. IN SOME CASES, THE OPTION MAY NOT MOVE AT ALL OR}

_{EVEN MOVE IN THE OPPOSITE DIRECTION OF THE UNDERLYING FUTURES CONTRACT.}

 

_{Paul Brittain}

Whitehall Investment Management

_877-270-8403

_702-463-0718

_{paul@binvstgrp.com}