Looking for opportunities in soybean oil
When was the last time you took a trade in soybean oil (BO)? It might not be one of the more well-known commodities, but that's of very little consequence. Perhaps you don't trade soybean oil because you don't know anything about it. But you don't really need to know much about it. It's a price series that can be traded from a quantitative perspective, regardless of the underlying. That's a neat aspect of quantitative, systematic trading.
In the shorter term, we've seen a bit of a move up. Those who follow my articles know that they are often about taking the opposite side of counter-trend moves. This time we have a very steep long-term trend with a short-term bear market rally. That means good probabilities for shorting into the current strength.
Management and risk description
Sell to open into the current strength. The contract to trade at the moment is December. The ticker is either ZLZ5 or BOZ5 depending on your market data system.
Entry: Sell on current levels, around $0.2885.
Stop: Take stop at $0.3029.
Target: Profit-taking at $0.2597.
Time horizon: Around two weeks.
December Soybean oil futures contract
— Edited by John Acher
Non-independent investment research disclaimer applies. Read more