Wheat (March 2018)
Buy 1 ZWH8 550 Call for 4^0 or better. The total risk is $200.00 plus commissions and fees.
Australia’s wheat crop is getting smaller as Queensland, Northern New South Wales have experienced some drought and freezes. Brazil is expected to be dry the next 10 days. Argentina may having drying in wheat production areas. South Africa remains too dry for winter wheat. India has lost their yield due to rain. Eastern Ukraine and some of Russia’s southern portion may have continued drought. Russia and France had a large wheat crop, but the world carryout numbers were reduced from 258.56 MMT to 255.83 MMT. The USDA showed ending stocks unchanged from the previous reading at 933 mil bu. When natural disasters strike, they may be prone to garnish supplies to feed the displaced people affected. More demand may arise.
We monitor the options position and will attempt to double the premium on the trade.
The minimum tick is 0^1 equivalent to $6.25.
To close the position!
Sell 1 ZWH8 550 Call for 8^0 or better. The total dollar value would then be $400.00 less commissions and fees.
The Expiration of the option is February 23rd, 2018
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This is a long shot as most options expire worthless. The odds favor the writer or granter of the option. The reason to buy options typically may be for the prescribed risk factor except in the case that an option goes into the money and is exercised. It would then become a futures position requiring margin.
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