Observations #
The products I’m following seem to be quiet, probably due to the National Day holiday. Therefore there is not much to comment on.
One potential trade is to go short on C2611’s call at 2200, which is a key resistance level, even though the implied volatility is not high. However, this can be viewed as a delta trade, as I don’t think front-month corn futures will go up, because supply is expected to be good while demand remains poor. Now the price is probably supported because of the holiday, and people think that the price will not fall below the marginal cost. However, there is no physical law preventing the price from falling below marginal cost. Therefore I believe the downside potential is larger than the upside, so selling a call would be a possible trade. Note that if it gaps down, then it would not be a good idea to chase.
Plan #
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