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Here are some trade ideas to consider that are longer term in nature. I am advising a course of actions that are currently counter to where managed money or the overall trend is at currently. Whether they are near record long or record short, I’m proposing that we look the other way and bet that prices eventually trade back near where we closed 2024. In my opinion these spreads offer appropriate ratios. We are selling option premium in the form of call and put spreads. These will increase the acct balances exponentially but not the liquidation values on the statement. The goal is having those liquidation values increase by getting on the right side of the market and exiting with keeping at least half the collections. There are no guarantees of course and the ideas below are my opinion. Risk and Margin requirement included.
Soymeal
Managed Money record short. Sell the March 2026 Soymeal 4.10/3.50 put spread for 54 points. Collect $5400 upon entry minus commissions and fees. Maximum risk is $600. Suggest risk is $400 plus trade costs and fees. Work to buy back at 25 points. IF realized it would be a gain of $2900 minus commissions and fees. Margin per 1 spread = $407.00
Soybeans
Funds don’t have a meaningful position here. I like the upside trade given the fact we are planting 3 million acres less soybeans than last year. Weather is still 90% of the pricing influence in my opinion and longer term forecasts a major unknown in regards to key yield development time July through September. January 2026 options. A weather premium if built this Summer could in my opinion rally the new crop market to 1210. That price represents 20% higher on year. In my view January beans could test that level. Trade is to sell the 11.40/13.00 put spread for $1.40 or 7K collection minus trade costs and fees. The maximum risk here is 20 cents or1K plus trade costs and fees. If my target is hit, I look to buy back the put spread for 60 cents, which would collect 80 cents or 4K minus trade costs and fees. Margin =$507.00
Gold
Managed Funds, Central Banks, Retail Investors, all long in my opinion. Market closed 2023 at $2071 per ounce. Closed 2024 at $2641 an ounce. April 2025 lows at $2970 (Liberation Day). I am looking for the all-time high to get challenged at $3509 potentially. If that happens, I would suggest a short position. Sell the November 2025 2900 vs 3000 call spread at a $9500 collection. The maximum risk here is $500 plus commissions and fees. I’m looking for Gold to pull back to the 2950 level by late October, that would still leave it over 10% higher on year. Should that happen I’m looking to buy back the spread at $5000 for a $4500 gain minus trade costs and fees. Margin per 1 spread =$600
Feeder Cattle
Feeder Cattle Prices at All Time Highs, Managed Funds near all-time record highs. Sell the October 25 Feeder Cattle 260000 vs 271000 call spread at 1000 points. The maximum risk is 100 points or $500 plus trade costs and fees. We closed 2024 at 262.97. The February lows at 263.150. April 25 lows at 272.100. Should a correction occur I look for that to happen in the July-Sept timeframe potentially. Should futures prices retreat back to where they came from, I look to buy back the call spread at 500 points for a $2500 collection minus trade costs and fees. Margin -$183.00
Natural Gas
Prices closed 2024 at 3.63. We saw the market trade above 5.00 in late February and early March. Only to see the market pull back to 2.85 this Spring. I think this market in my opinion is the gift that keeps on giving over the next few years on increased usage domestically, increased overseas demand and potential geo political issues that keeps dips bought, not to mention possible weather anomalies. Sell the March 2026 $7.00/6.00 put spread for 9.00 or a 9K collection minus trade costs and fees. The maximum risk is 1k plus commissions and fees. My target for natural gas should a rally occur is 5.75. That price represents a 50% retracement from the 2022 high (10.02) to the 2024 low (1.48). Should 5.75 get filled, look to buy back the put spread at 4.50, for a $4500 collection. Margin =$318.00
In summation, 5 long term options trades suggested. Option premium collected, $34900 minus commissions and fees. Maximum risk adding all 5 combined is $3700 plus trade costs and fees per 1 spread each.
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Sean Lusk
Vice President, Walsh Commercial Hedging Services
Direct: 312-957-8103
Fax: 312.256.0109
Walsh Trading
311 S Wacker Drive Suite 540
Chicago, Il 60606
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Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.