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Robert Edwards'  Instablog

Robert Edwards
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Contrarian daytrading technician who specializes in locating high probability short term trades while predicting price movement directions with over 85% accuracy. Most of my trading involves either extremely short term micro scalping of stocks or commodities (using 1 minute bar charts), or swing... More
  • I Am Long June Lean Hogs & Short June Lean Hog Calls For Protection 0 comments
    Apr 4, 2013 12:59 PM

    On Feb. 28, 2013, I wrote an instablog about being bullish Lean Hogs seekingalpha.com/instablog/6143431-robert-edwards/1599091-time-to-buy-lean-hogs where I was anticipating a low in April Lean Hogs. That did occur. Then on March 17, 2013 I wrote an instablog seekingalpha.com/instablog/6143431-robert-edwards/1658911-why-is-live-cattle-making-new-lows where I explained how Live Cattle was not bottoming but Lean Hogs were. I mentioned that I might sell puts in October and December Lean Hogs.

    What I did do instead was buy June Lean Hogs and for protection, sold out-of-the-money calls. I went long June Lean Hogs when it was trading 8750 to 8800 and sold a June Lean Hog 90, 96 and 98 call. June Lean Hogs are now trading above 92 so the 90 call is in the money so I must remain long one contract to protect that call. If we rally higher towards 96 or 98 I must buy more contracts to cover those calls as well, so during the day I go long an additional June Lean Hog contract and scalp 6 to 10 tick moves or more at a time. I try to earn upwards of $500 daily just scalping an extra contract for a few ticks at a time. With $10 for every tick and a daily range of $1 to $1.50 or more, or 40 to 60 ticks, It is not that hard to make a lot of money day trading Lean Hogs. Margins are very low at less than $1,500 a contract. Day trading Lean Hogs continues to be my bread and butter trading strategy that pays the bills.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: I am Long June Lean Hogs and short June Lean Hog Calls

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