As we approach the end of the year, market volatility has been higher than expected. This has created less trading opportunities for the strategy. This has been particularly evident in the Wheat and Soybean markets, as we have had to close our positions earlier than anticipated.
We are also seeing unusual activity in the meats market. Specifically, the Live Cattle markets have been working as anticipated, however the Lean Hogs markets have not. We are currently trading a butterfly strategy in the lean hogs that has a range of 2-3 points ($1200-$1600) and this year we are seeing 5-6 ($2000-$3000) point movement, which is a large deviation from the price and is increasing the volatility in our strategy. This is extremely unusual and is not something that we anticipate to continue.
The Eurodollar(GE) curve has remained flat. We have however been able to take profit in some of our positions. If the curve slope remains constant, we will be able to take more profits in our open positions.
With an increase in attention to long term goals, we are also starting to implement spreads that have a long-term approach (2016-onwards).
As always, if you have any questions please do not hesitate to contact with me.
If you have any questions please do not hesitate to contact us at your convenience.
— Gregory Placsintar
— Miguel Sanz Castello
THE RISK OF LOSS IN TRADING COMMODITIES CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS.