So, as I indicated in my blog entries last week, I took up multiple contracts in this trading week. I initiated trade in a total of three contracts and realized gains in two of them, while incurring losses in one of those. Therefore, my overall gains amounted to $3624 and I am finally making some profit.
My strategy, initially, was to go long on a long term contract, which I did by buying one long contract for March 2013. The logic behind was theoretical, simple and purely based on the course material, and out of my other two contracts this is where I made the most money ($2087.5). So, I went long because as Jim had mentioned that the prices rise in the offseason rise due to storage costs. Moreover, I figured that crop would be much better next year, as there is little probability of drought and traders will most likely stock out.
With my other two contracts, I first went with a long contract for December and gained $1649 but I pulled out by the night. The reason I pulled out was because one of the website indicated a downward price trend. Thus, as it turned out I was consulting the price changes from more than one source and I was falsely led to believe by one of the sources that prices are going down. Thus, after pulling out I went short on corn for December and ended up losing $112.5.
Summary:
(1) Dec(C2Z) – LONG : Price In:721 , Price Out: 754 , Gain/Loss: 1649
(2) Dec (C2Z) – SHORT: Price In:754 , Price Out:766 , Gain/Loss: -112.5
(3) March (C3H) – LONG: Price In:717.75 , Price Out:769 , Gain/Loss: 2087
(4) Equity (Last Week): 39060.25. Equity (This Week): 42834.3
Yijeong
October 2, 2012 — 9:10 pm
I like your summary. And well done on your investment. You made a lot. That’s about 7% return over a week!