I've been a little light on blog posts, but when an event comes about with such high importance, I knew it had to be shared. I was blessed with the presence of Grandma and Grandpa to give them a tour of the floor at the Board of Trade on "May Day". Unfortunately for Grandpa it was a fast lesson that talking with hand movement doesn't work well in all environments. As a story about the flower trade in Amsterdam began near the livestock pit, Grandpa raised his hands a bit too high where he was filled on selling a 10 lot in June Cattle only 8 ticks from the low of the day. As there is a wide variety of different trading styles, Grandpa's aggressive short position was looking to become a big-time losing trade once we caught wind of some 162 cash cattle moving in Texas. Fortunately for Grandpa he was saved by the more disciplined and patient trader... Grandma. Now while you would expect Grandma to melt Grandpa's opposing trader with kindness, sweet talk, and an evening meal of Aurelio's Pizza washed down with RC Cola, she instead took the pit by surprise. The quick decisive action of hedging off Grandpa's risk with deferred contract spreading and buying a few call options at delta neutral, saved Grandpa from a $12,200 margin call. (I'm touting it as The Trade that saved our gifts for Christmas)
Afterword we visited the bond options, soybean oil, corn, hogs, and the dairy pit. We then watched the cattle pit close at 1:00PM. I feel like Grandma and Grandpa would have fit in well had they chose commodity trading as their initial profession. We made friends and exchanged stories with everybody we walked past. Shortly after we parted ways, (I went back to work and G&G went to lunch) I had realized that they have been instilling trading principles in all of us for many years. Their 60 years of marriage has shown us that if you navigate a volatile market with discipline, patience, proper execution, and the willingness to take risks that you will come out with a positive balance. Now over those 60 years there has surely been a bad trade or two, but fortunately as traders they have faith that their margin clerk (The Good Lord Above) will help bust out of a bad strategy. What a great demonstration that the risk of living a Christ-led life can sometimes be high, but the reward is much greater.
I had a great time being able to show G&G what it is I actually do and I should add that my enjoyable service means I have been taken off the gardening and gutter cleaning duties list. This is a picture of us in front of the cattle pit shortly after the close.
Disclaimer: There is a risk of loss in futures and options trading and is not suitable for all investors. Past performance is not indicative of future results.
