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For: Tuesday 06-08-2010

Double Bottom

The corn market has shed about thirty five cents in about a week. The market is surging into the parallel line that forms a trend channel. We also have a retest of last fall’s lows. Given the steep sell off we should have started to peak volatility in the options and we will look to sell out of the money puts expecting a bounce or at least some sideways action.

Aggressive traders may opt to use futures. As always please consult your personal broker at Great Pacific Trading Company to see if this trade is suitable for your account.

Trade Recommendation: Sell the September 320 put for a credit of eight cents on a limit. Risk the option doubling in value. (>$800 not including commissions and fees), Look to take profits if the option trades below one cent.