SM Q - SM F5 (old vs new crop)

bgold

Established member
532 5
mheitkoe said:
Hi bgold,

just another example of a nice Corn Spread (CH05-CU04). I'm in this trade (at 5 3/4) since mid Jun and current price is around 15.

My trading plan:
Consider entering a Corn spread CH5 – CU4 at a spread value of 5 ¾. Margin for the
spread is $237 (reduced margin). Suggested risk is $150. Initial projected objective is
$150, then a move to 18. Basis is seasonal and a RH.

06/14 It was possible to enter the trade today.
06/16 Suggest exiting if the spread doesn’t move up tomorrow.
06/21 Spread is trading close to my first target.
06/22 Spread reached my first target. Suggest moving the stop to b/e.
06/25 Suggest moving the stop to 10.
07/06 Suggest moving the stop to 10 ¾.

Cheers
Mike

Thanks for posting your trading methodology. Provides great insight. I have to admit that I had thusfar overlooked the "special spread charts" section :eek: I probably have concentrated too much on MRCI's monthly seasonals.
No, I do not read Toepke's weekly for exactly reason you mention and rather belated publication which usually near optimised entry dates.
Looking at the MRCI charts and reading your trade mngt rules, your methodolgy for picking targets and stops is much clearer. Do have to admit I like to understand the big picture (eg fundamentals of seasonal patterns, whether it is old vs new crop, retooling in oil refining or supply/demand trends in grains, etc)

I still only occasionally trade the spreads but more regularly the outright seasonal set-ups. It is a matter of time and completing my spread trading plan. Your insights are very helpful. No doubt also to many other fellow traders. Thanks jeroen
 

bgold

Established member
532 5
Who said spreads were less risky

The balloon burst! Obviously, enough beans and meal available for delivery for the August meal contract!! (and the market hasn't even closed).
 

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