Option Trade of the Day

Corn is heading into a seasonal trend of higher prices as the uncertainty of planting season should offer opportunity for price increases going into the next several months. Technical indicators are also offering support to a rebound in prices. To take advantage of this price turnaround; Buy the July $4.00 call, Sell the July $4.50 call, and sell the July $3.40 put. The trade looks like it can be done for a payment of $50-$100 plus commissions (there will be 3). Maximum profit on this trade will be $2500.00 minus premium paid and commissions. The trade has unlimited risk under $3.40, where it will have the same risk as a long futures position.
March Japanese Yen futures are showing signs of technical weakness from its 2010 rally. We feel that most of the lower yielding currencies (US Dollar, Japanese Yen) are due for a pullback. To take advantage of this possible retracement, buy the March Japanese Yen 110 put, sell the March 107 put, and sell the March 116 call. The trade can be done for a payment of around $100.00 plus commissions (there would be three). If you wish to be a little more conservative, sell the 117.00 call, which would bring the cost of the trade up by about $100.
The maximum profit on this trade is $3750.00 minus what is paid on the trade plus commissions. The trade has unlimited risk above the 116.00 level in the March Yen contract.
March 30 year Bond futures continue to struggle with technical resistance. With supply issues and deficits continuing to weigh on buyers sentiment, we are expecting another pullback to the downside of recent ranges. To take advantage of this opportunity, we like buying the March 30 year 118 put, selling the March 116 put, and selling a March 121 call. The trade can currently be done for about $100.00. The maximum profit on the trade is $2000 plus any credit you might receive, minus commissions (of which there are three). Risk occurs above the 121 level in the March 30 year contract, where you will have the same risk as being short a March 30 year futures contract.
Please contact us with any questions or if you need assistance putting this trade together – email paul@binvstgrp.com
Paul Brittain
Whitehall Investment Management
Commodity Trading School
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.