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Hi all,
Well, a few weeks back, I was bullish on SoyBeans. My indicators were
showing a strong possibiliy of increased volatility, and higher prices.
In view of the possible increase in volatility, and low premium cost,
I deceided to be a bit defensive, and implemented Long option straddles
in May Beans.
1. I was wrong about the mid term direction. Beans did trade up, but
then collapsed. In my bullish bliss, I totally ignored signals that
were telling me to get out of the long side.
2. I carried out this entire trade like a total fish. If I had been
trading futures here, they would have had to fill the body bag with
tooth-pick sized remains.
Fortunately, the flexibility of options saved me here. Because the
market volatlity has continued to increase, my straddles still show
a $100 profit per straddle after commissions.
Man. wrong market direction, and trading with the technical sensitivity
of a grapefruit, and I still lived.
I LIKE OPTIONS.
Walt Downs
CIS Trading
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