ES made a 1% downward move on this Monday. It may be the starting point of the Sept/Oct effect. I decided to explore trading SPX & RUT credit spreads in QII account instead of selling ES futures due to my margin tied up in grains. It made me realize that trading credit spreads of SPX and RUT may give me a better % of ROI, lower margin requirement, and fixed risk. However, my commission cost may be higher since I need to buy two contracts to make one trade. I will have to study SPX and RUT price movement further. I assume to get $80-110 credit per trade which will be equal to 8-11% return per trade. The down side of this strategy is that I can't trade it after hours in case of a major event. Also, SPX appears has much less spread in my $10 range. RUT is more volatile and I have traded it in my personal account. It requires more patient.
Grains had another down day as normal now. Wheat popped briefly at open due to a sale to Egypt, the first in 6 month. I rolled over my Oct 510 to May and booked the loss. I also bought couple more wheat and soybean puts for Nov in anticipating another down thrust on better harvesting numbers and next USDA report. Corn and soybean made another contract lows. I want to study historical price charts before I do more rollovers. The grains' down trend seems much severe than I anticipated. Giving the fact this may be the best production year ever I need to prepare for the worst.
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