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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.

Bullish Plays

• Buy the HEJ26 (April Lean Hogs) Call 100 Strike and sell the HEJ26 (April) Call 120 Strike for 100 points per spread or $400.00 plus commissions and fees per spread. Maximum value at the options expiration (4/15/2026) if both strikes are in the money is $8,000.00 less the trade costs and fees.
• Buy the September Chicago wheat 7.00 call and sell the Chicago wheat 8.00 call. Pay 10 cents or $500.00 plus all commissions and fees. Maximum value at options expiration on (8/22/2025) if both strikes settle in the money is 10K minus trade costs and fees.
• Buy the December 2025 Soymeal 350 call. Sell the December Soymeal 400 call. Pay 5 points or $500 plus all commissions and fees. Maximum value at options expiration (11/21/25) if both strikes finish in the money is 5K, minus trade costs and fees.
• Buy the November 2025 Soybean 12.00 call. Sell the November Soybean 14.00 call. Pay 10 cents or $500.00 plus all commissions and fees. Maximum value at options expiration (10/24/25) if both strikes settle in the money is 10K minus trade costs and fees.
• Buy the December Crude Oil 85.00 call. Sell the December Crude Oil 95.00 call. Pay 45 cents or $450.00 plus all commissions and fees. Maximum value at options expiration (11/17/2025) if both strikes finish in the money is 10K, minus trade costs and fees.
• Buy the March 2026 Cotton 85 call. Sell the March 2026 Cotton 100 call. Pay 70 cents or $350.00 plus all commissions and fees. Maximum value at options expiration (2/6/26) if both strikes finish in the money is $7500, minus trade costs and fees. 

Bearish Plays 

Buy the GFK25 (May Feeder Cattle) Put 270000 Strike and sell the GFK25 (May) Put 260000 Strike for 100 points per spread or $500.00 plus commissions and fees per spread. Maximum value at the options expiration (5/22/2025) if both strikes are in the money is $5,000.00 less the trade costs and fees.

Buy the LEM25 (June Live Cattle) Put 190 Strike and sell the LEM25 (June) Put 180 Strike for 100 points per spread or $400.00 plus commissions and fees per spread. Maximum value at the options expiration (6/6/2025) if both strikes are in the money is $4,000.00 less the trade costs and fees.

Buy the October 2025 Gold 2650 puts. Sell the October Gold 2550 put. Pay 5 points or $500 per spread plus all commissions and fees. Maximum value at options expiration (9/25/25) if both strikes finish in the money is 10K minus trade costs and fees.

Buy the October Silver 26.00 put. Sell the October Silver 24.00 put. Pay 9 points or $450.00 per spread plus all commissions and fees. Maximum value at options expiration (9/25/25) if both strikes settle in the money is 10K minus trade costs and fees. 

Sean Lusk

Vice President Commercial Hedging Division       

Walsh Trading

312 957 8103

888 391 7894 toll free

312 256 0109 fax

slusk@walshtrading.com

www.walshtrading.com

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.