Lumber in my opinion, can potentially move lower towards 275.00 and potentially 250.00 for the MARCH CME Futures Contract last at 331.40 as of this writing(see chart).Today’s housing numbers indicate weakness in both existing single family and new single family homes. Construction in new single family homes hitting a 1.5 year low, while housing starts also fell in the revisions 1.217 vs 1.228. Existing Homes on the market have risen and are not getting any help as interest rateshave risen and can rise again tomorrow. Some areas in the US have existing homes sitting on the market over 60 days even with tight inventories and prices have stalled as well. Rising interest rates have sidelined many first time home buyers, this also shows concern for forward economic weakness.
I am suggesting MARCH Put Options on Lumber Futures, the underlying Futures Contract is MARCH Futures.
MARCH OPTIONS EXPIRE IN FEBRUARY 2/28/2019
The March 290 Put cost 4.9 = $539.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade, also the MARCH 280 Put cost 2.9 = $319.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade.
For a hedge on a sharp upside move consider the MARCH 375 Call costing 4.5 = $495.00 of quantifiable risk plus fees and associated costs per transaction to enter the trade.
To discuss any strategies feel free to call 888-391-7894 or email me peterori@walshtrading.com
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