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Oct 28 / Roson

Week 6 – The Road Ahead

We were talking about sustainability in FRE 515 this week. During the class, maybe one of our classmates raised concerns and questions about managing the study load and pressure during the crunch time with exams and ongoing course work.  Professor Ron mentioned about prioritizing which is a key in time management.  Priorities change as things come up and down. For example, these few weeks,  exam and presentation matters have come to the top of priorities, so the majority of my time, thoughts and emotions have been on them as well.   Another comment made by classmate Gabi during the class discussion has also stuck in my head, which is lack of sleep for consecutive days or a longer time period is not sustainable for a person.  Arise from the above comments, I want to be honest about the following:

  1. I haven’t been able to keep an eye on the commodity market these days; I haven’t been up to date with the relevant daily news which creates difficulty for myself to make decisions in trading.
  2. I realized that I was unfocused and careless after I found out a few mistakes I made in the trading this week;  One of them was a major mistake and it created a very panicky day for me.
I sincerely hope that after this week’s Midterm (our last midterm), I will be able to fully come back to the trading mode.
Anyhow, for the mistake I made in my price limit order last Friday (misplacing the number of contracts and price limit), I ended up holding 37 short Corn contracts (C2Z).  I am very worried about how to properly offset them.  I have placed the Stop Loss order and Price limit order to try to offset them on Monday. I basically don’t hope to lose (too much) over these contracts rather than make a big gain. (I’d really love your comment on this.)
C2Z:
  • My Existing Shorts:  Price-in: 739.75,  Current Price: 737.75  (gaining $100 on each contract)
  • My Pending Longs to offset the above:  Price Limit: 735 , Stop Loss: 740
On the other hand, I anticipate the prices of the crops to rise on Monday based on the following factors:
  • The crude futures went back up last Friday before the market closed after a two-week fall.  I anticipate some rise on corn and soybeans on Monday attributed to the spillover effect from the crude futures[1].
  • Asian currencies are strengthening[2] which would likely to stimulate more imports to the region.
  • Good harvest news on corn and soybeans in Canada[3]
  • Hurricane Sandy is coming to hit the northeast US (the graph below shows its strength and path).  Although it’s a Category 1 hurricane it’s predicted to become a worst hit to the area in 100 years[1].  The fear and the damage from this Hurricane would probably drive the prices up on Monday.  (drive up the cash prices, the basis, and the futures prices)
Hurricane Sandy Oct 28, 2012

Hurricane Sandy Oct 28, 2012
Source: wunderground.com[4]

I will keep an eye on the daily News to correct or help further predictions over the week.

 

References:

1. Shenk, Mark and Zhou, Moming. (2012, Oct 26). Crude Pares Second Weekly Loss as Hurricane Approaches. Retrieved from http://www.bloomberg.com/news/2012-10-26/oil-fluctuates-as-u-s-economy-grows-more-than-forecast.html

2. Teso,Yumi. (2012, Oct 26). Asian Currencies Strengthen in Week on Signs of China Recovery.Retrieved from http://www.bloomberg.com/news/2012-10-26/asian-currencies-strengthen-in-week-on-signs-of-china-recovery.html

3.   Shiells, Terryn . Service Canada. (2012, Oct 26).Ontario soybean/corn crops yielding better than expected. Retrieved from http://www.grainews.ca/news/ontario-soybean-corn-crops-yielding-better-than-expected/1001799451/

4. woundergroud.com. (2012, Oct 28). Hurricane Sandy. Retrieved from  http://www.wunderground.com/tropical/tracking/at201218_5day.html?MR=1

 

Filed under The Road Ahead, Trading Game

2 Comments

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  1. Yijeong / Oct 29 2012

    Thanks for sharing. You may want to use “Time Limit” order. Let me send you an email about it.

    Reply
  2. Roson / Nov 2 2012

    Thanks Yijeong. I will try to use it tactfully in the future too.

    Reply
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