Seasonal Corn Option Trade
07/28/2010 12:01 am EST
December corn is heading into a seasonally weaker time period and the charts are showing signs of a change in direction, suggesting the market is heading lower.
We are buying the December 370/330 bear put spread and selling the 410 call as a naked leg. The spread will cost you $125, not including transaction costs, which would be the risk with the market under 410; above 410, the risk is unlimited. The profit potential is limited to $2000 minus costs.By Paul Brittain of WhiteHall Investment Management