Small Options Traders Get Aggressive As Soybeans Fall

  • Jason Goepfert

    Jason Goepfert

    Published: 2018-06-19 at 08:35:43 CDT

This is an abridged version of our Daily Report.

Small traders become aggressive

The smallest of options traders have become remarkably aggressive in betting on a market rally.

Their volume of opening call purchases is nearing record highs, last seen in 2000 and 2007. They are spending more than 42% of their volume on buying calls, the most in more than a decade.

A bad few weeks for beans

Soybeans have lost more than 13% in a few weeks and closed at the lowest level since 2013.

That’s one of the largest losses since 1970, which has led to multi-week rebounds. Longer-term returns were mixed, and there are other headwinds like seasonality.

All in, and then some

Last week, active investment managers went to a leveraged long position in stocks. Sounds bad, but the Backtest Engine shows that over the next month, the S&P 500 rose 82% of the time after the other times managers were this aggressively long.

A week of small losses

The Dow Industrials have lost ground for the last 5 sessions, but no more than 0.5% each day. That has triggered 18 times since 1929.

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The post titled Small Options Traders Get Aggressive As Soybeans Fall was originally published as on on 2018-06-19.

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