7-9-10
September British Pound is peaking out at the .764 Fibonacci Retracement area and should start to sell off. We are looking for the market to possibly take out May’s lows on the next leg down so we are buying the September 149/145 bear put spread and selling the 154 call as a naked leg which makes this a credit spread (initially) of +$90 before commissions. The risk on the trade above 154 is unlimited while the profit potential is limited to 4 points or $2500.
November Beans have rallied enough to satisfy their Fibonacci Retracement needs as we head into a seasonally weaker time of year. At the moment they are using weather fears to fuel their rally, however we are sitting on a really huge crop both here and in South America (harvested for the most part) and we could see the market sell off to below $8.00 before the end of summer. We are buying the November 940/840 bear put spread and collecting extra premium by selling the 1000 calls bring the premium down to a penny or $50 for the spread not including transaction costs. This would be the risk with the market above 940 but below 10.00; above 10 dollars the risk is unlimited. The profit potential is limited to $5,000 before premium and transaction cost considerations.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS
There is a substantial risk of loss in trading futures and options.
PLACING CONTINGENT ORDERS SUCH AS “STOP LOSS” OR “STOP LIMIT” ORDERS WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS. SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.
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
Commodity Trading School
877-270-8403
