Bought to open CORN 10/21 expiration $17 strike calls

action

Bought 5 contracts of CORN 10/21 expiration $17 strike calls at $1. Total cost including commission is $511.70, or $1.02/share.

strategy

Its web page describes the CORN ETF as follows:

The Teucrium Corn Fund (NYSE: CORN) provides investors unleveraged direct exposure to corn without the need for a futures account. The Teucrium Corn Fund was also designed to reduce the effects of backwardation and contango.

The investment objective of the Fund is to have the daily changes in percentage terms of the Shares’ Net Asset Value (“NAV) reflect the daily changes in percentage terms of a weighted average of the closing settlement prices for three futures contracts for corn (“Corn Futures Contracts”) that are traded on the Chicago Board of Trade (“CBOT), specifically (1) the second-to-expire CBOT Corn Futures Contract, weighted 35%, (2) the third-to-expire CBOT Corn Futures Contract, weighted 30%, and (3) the CBOT Corn Futures Contract expiring in the December following the expiration month of the third- to-expire contract, weighted 35%, less the Fund’s expenses.”

My rationale to buy CORN can be summed up in one chart: Monthly Chart of CORN, from Finviz.com

Corn (like wheat) is highly oversold. Both grains trade at multi-decade lows. I am taking a stab at it at this price. Because I am looking to contain my risk and because implied volatility is relatively low, I am doing this with options.

August 30, 2016 at 5:23pm · CORN · buy to open · options


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