Seasonal Plays at Forefront in for January Option Sellers


Jan

13

2017

Seasonal Plays at Forefront in for January Option Sellers

Head Trader James Cordier outlines a sudden abundance of option selling opportunities across several commodities sectors.
Click To Read Video Transcript

(Video Transcript)

Good afternoon, this is James Cordier of OptionSellers.com with a market update for January 13th. Well, welcome to 2017. This January, and most January’s in the past, has kicked off investing by normally looking at some of the most favorable seasonal positions that we get coming down the pipe the entire year.

This January, we have three of our most favorite seasonal trades coming up. One is going short wheat. The USDA this past week noted that world-ending stocks for wheat are at all-time highs, making a large rally going against some of our short call positions seem quite unlikely. Coffee supplies in New York are at 10-year highs, making a 60-70% rally against those fundamentals very unlikely, so we will be selling calls in coffee in the coming 30 days.

One of the positions that should work very well the next 3-4 months is long soybeans. The seasonality of soybeans to start rallying at the end of January until April and May seem quite high. This year, right now with the protein demands, especially out of Asia, we think that protein consumption is going to be extremely high and the demand for soybeans and soybean meal will be extremely high, as well. These three seasonal trades will wind up in your account in the coming week or two and, we think, will go a long way in diversifying accounts for 2017.

We’re expecting an exceptionally good year starting January and hopefully working all the way through December. We’re looking at having a very balanced portfolio utilizing a lot more than eight commodities that we often follow; however, in 2016 we just didn’t have the opportunities, so we were in mostly precious metals and in energy, as all of our clients know.

In 2017, we’re looking at utilizing practically all the eight commodities that we follow and these three new ones will be going a long way to diversifying your accounts to do just that. We’re looking for a much straighter equity curve this year and, hopefully, December 31st having a very nice return at year’s end. Anyone wanting more information from OptionSellers.com can visit our website. If you’re not already a client of ours you can contact our headquarters and speak to Rosemary about becoming one. As always, it’s great chatting with you and looking forward to doing so again in two weeks. Thank you.

  1. Sergej Gorev Says:
    January 15, 2017 at 2:12 pm

    Hello guys, i want to thank you for your educational content. It is great! I have a question. Where can i get access to Information about coffee stockpile in New York? I just can not find anything. Is this one of your factors in fundamental analysis of coffee? Thank you! And where can i get such information, because sometimes google shows its limits?

    • Michael Gross Says:
      January 17, 2017 at 3:06 pm

      Hello Sergej,

      We recommend private subscriptions to news feed services such as Dow Jones News, Reuters and Bloomberg. There is also good information available from the Ag Attaches from the USDA at http://www.USDA.gov.

      We review these daily and I advise any coffee trader to do the same.

      Thank you.

      Regards,
      Michael

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