|
Wiley,
The key issue, imo, is liquidity. In some commodities you pretty much have to trade the front month if you're short term (e.g. financials and currencies). In the grains though, I like to go out a little in time since the OI and volume is big enough on the far contracts. I trade May beans right now, but July would be just as good. I am not sure if this really matters, but in something like the grains, I would imagine the front month to be heavily traded by floor traders and commercial interests. Come June, I might start looking at the November contract again.
Option trading in the grains can be subdued in the fall-winter as volatility is low (usually), and time premium erodes relative to the undulation. This winter could be different, but I am concentrating on trading the contract right now. Nonetheless, I would treat either a futures or option position the same with respect to entry, exit, and money management. In selecting an option timeframe, it depends on what type of strategy you use and what type of move you're expecting. For my style, I usually buy options with no less than 2 months until expiration. When selling options, I usually sell and buy back within 3-4 days. I am not sure if I answered your questions or not... later
Regards,
Frank
|
