futures trading strategies
- To kick off 3 Great Tips For Grain Trading, it is thought that the most appropriate seasonal trade in the grain markets is to keep an eye out for the harvest lows in early October. In majority of years, the asking price of soybeans and corn are at their cheapest during October. Traders can feel quite confident using a more aggressive attitude to playing the probable upside in prices such as buying Futures contracts outright. It could also be a good plan to use option spread strategies with open-ended downside risk by using short puts in tandem with the unlimited upside of long call options.
- Even though the month of March through to the harvest lows, there has been price pattern weakness, bearish trades should be hedged or set up in a way, so the upside risk is diminished. Such as, purchasing puts gives traders limited risk with unlimited profit potential should the selling transpire suddenly. Those thinking of shorting futures contracts ought to consider buying call option/s for insurance.
- A few traders maintain it is advantageous to buy inexpensive deep out-of-the-money call options in the grain market during late June, July, or early August since they are aware that if there’s a drought prices can explode upwards. Traders also know that grain markets go up faster than they decline. Because of this, trading strategies with open-ended downside risk for instance purchasing futures outright with no protection, or selling naked put options, isn’t typically an ideal trading strategy this time of the year since seasonal probabilities are in opposition to the trade.
3 Great Tips For Grain Trading Conclusion
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