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March 14, 2008
I will assuredly be wrong but we are buying cotton
again.
We were blindly lucky enough to exit our longs on March 4th and
5th (right into the top ticks) when the options market actually
priced May cotton as high as $1.09...then watched the market
plunge back approximately 30 cents in the four days following.
I believe the recent action in Cotton is only a
prelude to the sort of move that may be coming...that is, some
sort of stupidly big bull move far beyond the highs seen on
March 5th.
Unfortunately, the extreme volatility has made option prices too
pricey to use the "2 & 1" effectively. I am therefore buying
futures with an at-the-money put against every contract
purchased, thereby defining my risk by whatever amount we spend
on the put.
If you're interested, give me a call...I'd also say there is a
LOT more going on in futures and I am heavily involved in
several other positions that I hope to put on paper in the near
future.
Probably wrong but I have to go with what I see...
Thanks,
Bill
866-578-1001
770-425-7241
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