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: CBOT Soybean Slide
This article will focus on 3 fundamental reasons why SOYBEAN FUTURES could continue lower.
MY ANALYSIS
Fundamentally, SOYBEAN FUTURES could continue to slide for 3 basic reasons:
1. China will potentially be proactive in fending off inflation, causing deflationary tones
2. Adequate rains in Brazil and Argentina
3. A possible reverse in trend in the USD to the upside, causing commodities that are traded in USD to move lower
Technically, SOYBEAN FUTURES sold off sharply in the past few sessions to close well below the near-term support and the mid term support, indicated by the market closing below the 9 day MOVING AVERAGE and the 20 day MOVING AVERAGE. Also the near term trend seems to be changing to down, indicated by the 9 day MA pointing lower.See daily chart below. For more charts, studies, and commentary go to: http://markethead.com/2.0/free_trial.asp?rid=McKinney
OPTIONS PLAY
We also buy in a 3 to 1 ratio a call in case the market makes a MAJOR move against us.
FOR OUR FREE REPORT ON OPTIONS ON BEANS FOR PEOPLE WHO DON’T KNOW BEANS ABOUT OPTIONS: http://www.zaner.com/3.0/mmck2.asp
WE ARE ALSO FOCUSING ON COMMODITY OPTIONS IN U.S. 30 YEAR TREASURY BONDS, GOLD, SILVER, OIL, GRAINS, SOFTS, and INDICES.
FREE QUOTE- “Diamonds are made under pressure.” -Peter Marshall
Before you place any of these trades in your account you should call or email me with your phone number for a detailed explanation of the strategies and the risks involved at 312-277-0115 or mmckinney@zaner.com.
Futures, options and forex trading is speculative in nature and involves substantial risk of loss. All known news and events have already been factored into the price of the underlying commodities discussed. The limited risk characteristic of options refers to long options only; and refers to the amount of the loss, which is defined as premium paid on the option(s) plus commissions.
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
