Grain Spreads: Commercial Hedge Spreads
We are looking for good risk to reward ratios using option spreads for low cost to entry, for the goal of catching bigger protracted moves in the underlying futures in our opinion. “The discussion of potential maximum profit does not imply the probable outcome of these trades.” The risk is the price paid for the call or put spreads plus all commissions and fees.
April 28, 2025
Commercial Hedge Spreads
Bullish Strategies
Buy the November 25 12.00 soybean call. Sell the November 25 soybean 14.00 call. Buy the call spread at 10 cents ($500) plus commissions and fees. Maximum value at options expiration (10/24/25) if both strikes finish in the money is 10K minus trade costs and fees.
Buy the March 2026 soymeal 350 call. Sell the March 26 soymeal 4.00 call. Buy the call spread at 5 points or $500 plus commissions and fees. Maximum value at options expiration (2/20/26) if both strikes finish in the money is 5K minus trade costs and fees.
Buy the March 2026 Chicago wheat 7.00 call. Sell the Chicago wheat 8.00 call. Pay 10 cents or $500 upon entry plus commissions and fees. Maximum value at options expiration (2/20/2026) if both strikes finish in the money is 5K minus trade costs and fees.
Buy the January 80.00 Crude oil call. Sell the January Crude oil 90.00 call. Pay 45 cents or $450 upon entry plus commissions and fees. Maximum value at options expiration (12/16/2025) if both strikes finish in the money is 10K minus trade costs and fees.
Buy the March 26 cotton 85 call. Sell the March 26 cotton 100 call. Pay 65 points or $325 upon entry minus trade costs and fees. Maximum value at options expiration (2/6/2026) if both strikes finish in the money is $7500 minus trade costs and fees.
Buy the November Natural Gas 7.00 call. Sell the November natural gas 8.00 call. Pay 4 points or $400 plus commissions and fees. Maximum value at options expiration (10/28/25) is 10K minus trade costs and fees.
Bearish Strategies
Buy the August Feeder cattle 270 put. Sell the August Feeder cattle 260 put. Pay 90 points for the put spread or $450 plus commissions and fees. Maximum value at options expiration (8/28/25) if both strikes finish in the money is 5K minus trade costs and fees.
Buy the October 25 Live cattle 185 put. Sell the October 25 live cattle 175 put. Pay 90 points or $360 for the put spread plus commissions and fees. Maximum value at options expiration (10/3/2025) if both strikes finish in the money is 4K minus traded costs and fees.
Buy the December 25 Gold 2650 put. Sell the December Gold 2450 put. Pay 5 points or $500 for the put spread plus commission and fees. Maximum value at options expiration (11/24/25) if both strikes finish in the money is 20K minus trade costs and fees.
Buy the December Silver 22.00 put. Sell the December 25 silver 20.00 put. Pay 4 points or $200 for the put spread plus commissions and fees. Maximum value at options expiration (11/24/25) if both strikes finish in the money is 10K minus trade costs and fees.
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
312 957 8103
888 391 7894 toll free
312 256 0109 fax
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.