Stopped Out Of Oil

The $50.00 stop which was placed on oil yesterday was hit, ending the synthetic corn position which I began initiating back on December 29.   After being stopped out 3 times for .053 in losses, the position took hold on January 9 at $56.80.

This trade netted $6.80 per barrel on the oil or $6,800 total.  When divided by 17,750 bushels of corn, this amounted to .383 per bushel which exceeded the initial goal by a nickel.  Adjust off the .053 in stop losses back when we initiated the position and we netted .33.  When added to the .35 collected on the wheat puts we sold back in December, we have a .68 jump on corn for 2017.  The pressure is not there to hope for some sort of drought someplace to take corn back above $4.00.  We could sell our corn now for $3.35 and still be above $4.00.  (I have yet to make a physical corn sale recommendation for 2017)
​The key to using synthetic strategies is to make these decisions at intermediate and yearly cycle highs and lows.  I am still anticipating oil to have at least one more cycle lower to complete a yearly cycle low, but this correction could be halted pre-maturely if the stock market roars higher.  Sometimes, oil will get dragged higher with a strong stock market.   If oil is allowed to complete a normal yearly cycle low, we will initiate another synthetic position at that time.