10/14/2013

Soybean futures options              Month January of 2014 (76)         ZSF4

Risk: Defined

Buy Jan 1420 call/Sell Jan 1520 call for 4.00 or better the risk is $200 (the contract multiplier is 50)

Maximum profit before commissions is $4,800.

January IV 19.30%

Open Interest is deep in the January options

Open Int. (est.)   strike         Jan.  Monthly (76)

1400                          6,600

1410                              80

1420                         1,150

1430                              16

1440                         2,550

1450                            130

1460                         2,850

1470                              43

1480                            695

1490                              41

1500                         2,550

1510                                1

1520                            645

1530                                1

1540                            304

1550                              49

January gives the trader 76 days for negative news on reports to come out and cause short covering in the markets which could conceivably happen with soybeans down approximately 35% from their early September HI’s and rallying roughly 38% back from the august LO’s of 1162.5. Above 1310 look for the a run to 1355 area and above there the 1405 area looks to offer the next resistance level with little above that up through the 1450- 1475 area which is around the mid-range where they had been trading from late November of 2011 through late June of this year before plummeting down to the 1150’s.The other technical factor that I see is the initial gap from 185 level hasn't been filled and correlates to the upper resistance areas at the mid to upper 1400’s

*Disclaimer: This is not a recommendation. All trading entails risk. Anyone employing any strategies and having limited knowledge of options trading should consult with a FINRA licensed professional.