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Michael: Hello everyone. This is Michael Gross of OptionSellers.com here with head trader James Cordier here for your April Option Sellers Video Podcast. Well, James, we didn’t see any abatement in the volatility in the stock market this month. In fact, Fed chairman Jerome Powell last week coming out, maybe spooking investors, talking about asset prices and maybe even financial markets being overvalued here… a little ghost of 2007. What do you think is going on here?

James: Michael, it’s interesting... for the first time since quantitative easing was first announced practically a decade ago, investors and money managers now actually will have an option of not just pouring money into long stocks but fixed income is going to now be some of the talk. The tenure is approaching 3%. With what Jerome Powell said this past week, we will be reaching 3%, possibly 3.25 and 3.5 coming up over the next 6-12 months. With that in place, does the stock market have now still a free ride to the upside? Investors are going to be putting some of their money into fixed income and for the first time in practically a decade there’s an alternative from just being long the stock market.

Michael: Obviously at this point, a lot of investors, especially high net-worth investors, are always looking to diversify into alternative asset classes. Physical commodities as hard assets always seem to have an appeal in any type of environment really but especially in this type where you have a lot of the jitters about paper assets.

James: There’s probably more jitters now than I can think of over the last decade. As you know, we have investors contacting us on a daily basis, I think, just for that reason. Investors wanting to diversify right now from the stock market, I think, is hitting a really great stride right now. Wanting to get into markets that are uncorrelated to what the DOW does and what the S&P does is not only really popular right now but a lot of the real investors, you know, the people with millions of dollars under management, they are looking for alternatives now and I think they’re going to find some, not only in yield bearing accounts like fixed income but certainly in commodities like what we do, as well.

Michael: Of course, we are in springtime now in the commodities markets. That means there’s a lot of things that happen in a lot of the physical commodities in the springtime, especially the agriculture markets and energy markets. We have some great seasonal tendencies, as well, in the spring.

James: We do. Needless to say, a lot of people look at commodities and they think about the weather. Over the next 90 days the weather will be a really big factor. Quite often, end users for soybeans, corn, and wheat, they need to get insurance and make sure that they’re going to have these products for what they do and basically for animal feed. Of course in the United States, the largest producer of corn and soybeans, the weather is key. Often, they build in a certain premium during the months of May, June, and July just in case the farmers in the United States don’t do exactly what they would have hoped each year. Of course, later on in the year, once again the U.S. farmers are the best in the world and the spring rallies that often happen normally are just great sales for doing what we do.

Michael: Speaking of those rallies or markets, we have a couple we’re going to feature this month that are maybe a little ahead of themselves. Now we have some of that inflated call premium. If you are one of those investors, it’s just learning how to sell options or learning how to sell options on commodities, these are two markets we think are really going to help you... Good opportunities, actually markets we are taking advantage of now in our management portfolios. We are going to cover those for you here in just a minute. Thank you.

Michael: Okay everyone, we are back with our Market Segment for this month’s podcast. The first(continued)

Good afternoon, this is James Cordier of OptionSellers.com with a market update for March 16. Well, in reading the Wall Street Journal this past week, and maybe some of you have read the same article that I was reading, it was talking about the end of Goldilocks. They were referring to interest rates creeping up towards 3% on the 10 year. Basically, they’re forcing investors and money managers to consider some fixed income. Goldilocks, of course, was interest rates at basically 0. They’re only real investment idea was to go along with the stock market. And, of course, US stocks and stocks abroad have done extremely well over the last several years.

And now, with the idea of fixed income becoming parts of certain portfolios, the stock market, while it still may climb in the coming year or two, will likely have to do it on its own accord – not just basically a free ride, which in case it probably has had them in the last year or two. Going forward, commodity option buyers love uncertainty. In our thoughts going forward, we do have a Goldilocks environment going forward for us. A vibrant US economy, a vibrant Asian economy, and of course the European economies are doing extremely well just recently. Along with rising interest rates, certainly not a rapid pace of raises, but probably a quarter here and a quarter there, that is Goldilocks for what we do here at OptionSellers.com.

A lot of option buyers love uncertainty. We see certainty ahead in many fronts. We thank 2018 for some of that reason. It’s going to be quite good. We do have seasonal trades coming up in the next 30 to 60 days, one being soybeans. We love the idea of being short that market going forward. We are going to have an abundance of soybeans this fall, and we think using strength in that market over the next 4 to 8 weeks is going to be an excellent idea. We think that’s going to definitely help pads accounts in 2018. Anyone wanting more information about OptionSellers.com, can visit our website. If you’re not already a client of ours and would like to become one, you can contact Rosemary at our head quarters in Tampa, FL about possibly becoming one. As always, it’s a pleasure chatting with you, and I look forward to doing so again in 2 weeks. Thank you.

Good afternoon. This is James Cordier of OptionSellers.com with a market update for March 2nd. For those viewers today who have read The Complete Guide To Option Selling, possibly Chapter 10, which describes the credit spread, our favorite form of positioning accounts in short options and commodities, we describe it as the Maserati of all option positioning. Basically, the credit spread allows you to add premium to the account and have a safety measure of having one long position versus possibly three or four short sales. Basically, what the long position does is it babysits the position until later on the market decays. We normally buy back the position and then we offset our one long position getting some of the premium that we purchased it for back and put into the account. Basically, what this does is it smooths out the equity curve in times of high volatility. The high volatility sometimes scares people but what that does is it allows us to sell options much further out in time and much further out in price than we would normally be able to do. 2017 we did extremely well during the low volatility times but we were selling strikes quite close, and in 2018 and 2019 it looks like we’ll be able to sell options even further out of the money and with all the luxury of having a long position on to protect it. We started doing that this past week in gold, and silver, and crude oil, and we’re now looking to position the exact same way utilizing the rally that’s going on in the wheat market right now – something we really feel is going to be an attractive position later this year. We think that the credit spread is going to offer great returns in 2018. We’ll just have to wait and see. As always, it’s a pleasure chatting with you and looking forward to doing so again in two weeks. Thank you.

Michael: Hello everybody. This is Michael Gross of OptionSellers.com here with head trader James Cordier. We’re here with your March OptionSellers.com video podcast. James, as we head in to March here, what’s on everyone’s mind is the obviously the big development we had here in February. Big stock sell-off, it’s on everyone’s mind right now… stock investors are busy brushing themselves off, wondering what’s next. Over here in commodities, we didn’t really see a lot of movement in the markets themselves, but we had some developments in the option and option volatility. Why don’t we start off this month by maybe just talking a little bit about what happened in stocks themselves.

James: Michael, it’s interesting, a couple of years ago we had BREXIT. We had Switzerland leaving the European Union, we also had the election outcome a year and a half ago. All these events didn’t really change fundamentals on a long-term basis, but what they did do is they injected a lot of volatility. The 3,000 point drop in the Dow Jones here just a couple weeks ago did exactly that. It turns out that there’s something called the volatility index in stocks. There was an instrument that was built for people to go short or long on it. It seems as though everyone was way short volatility. In the stock market, that got unwound, it developed a 3,000 point drop in the Dow Jones, and now we’ve got to the stock market recouping quite well. It’s probably going to continue to rally everything as far as we can tell. The U.S. economy looks good, the global economy looks good, stock profits look excellent right now. Volatility spiked in a dramatic way. For ourselves selling options on commodities, we saw volatility index spike as well. Precious metals, energies, and some of the foods did have a spike. In many cases, a lot of the positions we had did increase in value during this large increase in volatility. It’s not always fun when this happens, but it is absolutely a key ingredient in option selling. It allows us to sell options, as you know, 40-50% out-of-the-money. Without that creation that happens every 6-12 months in the volatility index in commodities and in stocks, we wouldn’t be able to do what we do. It’s a key ingredient and it did happen this past month. We’re very excited about the opportunities that it has now in selling options.

Michael: It was kind of ironic, James, because you and I were watching this unfold, we were watching the stock market take a nose-dive, and we’re watching our commodities boards and basically nothing is going on. We have gold and silver prices staying silver, the grains and foods were business as usual, crude took a little bit of a sell-off, tied into stocks, but that was really the only one. Over in natural we had to sell off, but that was really already under way. It didn’t have much to do with stocks. Yet, you saw option volatility spill over from that stocks and it increased the value of those options temporarily, but now you’re seeing that come off a little bit. Is that right?

James: It is. The volatility index in the stock market is practically to the same level as it was prior to the 3,000 point sell-off. In commodities, it has now come back about 75% of the level that it was at. The fundamentals never really changed at all, especially in commodities, and I think it sets up a great landscape for doing what we do. We’ll find out relatively soon.

Michael: You know, a lot of people, they want to get diversified from stocks. That’s one reason why they’re interested in selling commodities options in the first place. You know, it was interesting… on CNBC they had an article about on the biggest day down in the Dow it was down, what…1,075 points or something like that? They ran an article that there was only 7 stocks higher that day and 2 of them were cereal and tobacco. It was Kellogg and one of the tobacco companies- I forget which one. CNBC’s analysis of that was, “well, even when stocks are down(continued)

Michael: Hello everyone. This is Michael Gross of OptionSellers.com. I’m here with head trader James Cordier. Welcome to your first OptionSellers.com Podcast of 2018. You’ll notice we are doing this in video format this year and we’re hoping we can use some video accompaniments to help you understand some of the concepts we’re talking about. We still will be doing some audios throughout the year, but we hope you’ll like the new format. Here we are in 2018. Stock markets are raging. Global economies are doing pretty well right now. So, we have a lot of global growth going on right now. We’re going to talk about, starting off, what that might mean for commodities. James, maybe you want to lead into that a little bit. What do you see for commodities going on this year?

James: Michael, it’s interesting. Over the last several years, quantitative easing, here in the United States and across all of Europe, was thought to eventually make economies stronger. A lot of people were kind of not so hot on that idea, but certainly that has turned the corner. European economies are doing extremely well. China is bolstering once again. Here in the United States, along with some tax implications, the sky is the limit right now on economies worldwide. Of course, the stock market is doing great. Demand now for raw commodities look like it has finally turned the corner. There has always been too much supply. Needless to say, we had the Chinese economic boom of infrastructure spending several years ago. Basically, the market just came down from that and it has been waiting for real demand to finally develop and now we’re here. Copper prices, crude oil prices, some of the energies are making 2-3 year highs based on stronger economic growth throughout the globe right now. Chances for a weaker dollar look pretty special right now for 2018. All systems go right now for commodity prices, probably trending higher maybe throughout the year.

Michael: Okay. So, you see this as, at least partially, a demand-led type strength possibly into commodities as a whole in possibly 2018. I know you’ve been talking recently about inflation creeping back in to the conversation here. Let’s talk a little bit about that. What role do you see that playing in 2018 and how might that affect commodities?

James: Michael, 2% inflation has been the unachievable mark for several years now. Janet Yellen was trying to produce that. We’re finally there. A lot of some of the most brilliant people who do the bean counting for us for inflation are looking now at 2-½% inflation for 2018. The price of crude oil is such a dramatic input for different price costs throughout the world. A barrel of oil goes into grains and clothing and manufacturing. The price of crude oil has increased some 35-40% recently. That is going to start showing up in the inflation rate. We expect to see that probably the 1st and 2nd quarter of 2018, but investors are getting ahead of that right now. They’re not necessarily waiting for this 2.5, 2.75 inflation number to come out. They see it already and investors and traders want to get involved with it before the “white of their eyes”, they used to say.

Michael: Okay. So, many of the people watching this show are interested in option selling or selling options on commodities. Obviously, inflation doesn’t necessarily mean every single commodity is going to be rising in price in 2018, the core fundamentals are really going to be the determinative of that, but it is a supportive factor and something to keep in mind. As an option seller, as somebody that sells commodity options, or you’re thinking about selling commodity options, how does inflation, the possibility of maybe the index as a whole being a little stronger, what affect does that have for commodities option sellers?

James: Commodity option sellers can get into a market that has already taken off. For example, the price of oil was recently at 50 and it’s up at 65. A lot of investors(continued)

Good afternoon. This is James Cordier of OptionSellers.com with a market update for February 17th. Well, we look back and we see the Brexit about a year and a half ago. A little over a year ago, we had the surprise results in the U.S. election and now in 2018 in February we had a 3000-point move in the Dow Jones Industrial Average. And of course these three things all have in common is a great influx of volatility into the market. Basically, setting up very large premiums in both puts and calls in stocks and in commodities. While we’re positioned and looking at positions while the volatility index rises like that is not always the most fun, but we are looking at underlining futures prices in crude oil, and in silver, and in gold, and primarily they’re quite close to where they were as the stock market crash began. Of course now the stock market is coming back. It wouldn’t surprise us over the next two to three weeks to see them testing their recent highs yet again. And then we see the volatility index probably inching down. We do like the fact that volatility hit at the beginning of the year. It will likely come as we go into the second, third, and fourth quarter and at that point we should be able to make hay as the options then come back in and we position ourselves at this time. As so many clients refer to our cash position over the last six months, ‘why are we margined at twenty-five percent?’ Well, volatility was low and now you have your answer. We’re looking at putting premiums back into accounts. We’re looking at putting more margin facilities into use and we do like the idea of selling options now that volatility is extremely high. We’re looking at the second and third quarter of this year as likely decays in a lot of the options that we’re holding and look for new adventures such as natural gas. That market has traded absolutely perfectly seasonally the last eighteen months and we expect it to do the same thing again the remainder of the year.

Anyone wanting more information from OptionSellers.com can visit our website. If you’re not already a client and wish to become one, you could contact Rosemary at our headquarters in Tampa, Florida about possibly becoming one. As always it’s great chatting with you and looking forward to doing so again in two weeks. Thank you.

Good afternoon. This is James Cordier of OptionSellers.com with a market update for January 13th. Well, each year at this time, early January, we’re often trying to analyze the landscape of the upcoming year and try to find out what nuances, possibly, will be shaping trading this coming year. We appear to be about to get a helping hand from something that’s been lacking from the commodities markets for several years. That is one word that has been talked about often on the business channels as well as the Wall Street Journal recently, and that’s inflation.

Many money managers around the world want to participate in commodities but they really need a little bit of a push from time to time. 2018 looks like they’re going to get that. There are certainly some increases in certain commodity prices already this year. That has a lot of investors looking at the possibility for inflation and getting a hedge around themselves. Often, money managers want to buy precious metals, they want to buy energies and some of the foods, and that’s what has been lacking in commodities over the last 3-4 years.

We think that in 2018 we are going to have those additional buyers and participants in the market. Often, that increases the value of options, both puts and calls, something we think will be very well taken advantage of by us this year. We do want to add 2 or 3 commodities to our book this year. We’re hoping for grains to be a larger content of our portfolios and, of course, in the soft markets like coffee and sugar, as well. We do see that happening. We’ll have to wait and see.

We always want to be diversified as much as possible, but not just diversifying in order to only do that. We want to wait for opportunities. We think we’re going to get those additional opportunities in 2018. We’ll have to wait and see. We are very optimistic about the landscape going forward this year. We’re going to be trying to take advantage of those in the coming weeks and months, and we’ll see how we do.

Anyone wanting more information from OptionSellers.com can visit our website. If you’re not already a client and wish to become one, you can contact our home office in Tampa, Florida and ask Rosie about becoming one. As always, it’s great chatting with you and looking forward to doing so again in 2 weeks. Thank you.

Good afternoon. This is James Cordier of OptionSellers.com with a market update for November 10th. Well, so often in the investment world, we’re all looking for the next best buy, or which stock is about to take off, or which piece of real estate has been overlooked and is probably going to be increasing in value. Option selling, especially on commodities, is probably the only investment around where you can identify fair value and actually predict a market to go sideways in price and to prosper from it. Quite often looking for the next big winner in the stock market or in a commodities market is what everyone is scrambling trying to do. In 2017, some of our best investments were identifying fair value markets. We in think in 2018 we probably have a similar list coming up and we’re starting to take positions accordingly. Precious metals have a lot of interest right now. We think that gold and silver are going to be very well supported throughout the remainder of 2017 and probably the beginning of 2018, as well. A lot of investors are trying to diversify away from the stock market and that does include being long some precious metals. Of course, the stock market is precariously high right now. That has some gold fever taking place, as well I’m sure – and of course, you have North Korea, you have Saudi Arabia, you have things going on in Asia – these are all nice supporting factors for the markets of gold, and silver, and platinum. What’s so interesting right now is the third leg required for the gold market, in our opinion, to have a sustained rally, and that would be inflation. And we simply don’t have any now. We don’t see any coming anytime in the near future. This is providing a very stable mark in the precious metals. The gold market we do see having a $100 trading range. We see gold right now trading at approximately $1300 an ounce. We do see it getting up into the high $1300’s – probably in the next six to twelve months. We also see it testing the downside somewhat. It might go down as low as $1200. But we do see this probably being a collar on this market and, you can use the same parameters for silver, as well. One of our very best investments in 2017 was predicting fair value markets. We had a couple. We had coffee. We had natural gas and, we certainly had precious metals. We are positioning with this in mind for 2018 and, we think 2018 is going to be a very good year based on these facts. We’re shorting precious metals, up some sixty to seventy percent from the current price and, we love going long from thirty percent below the going market value because we are slightly bullish on the market, as well.

One fundamental factor that changed in 2017 and that was in the crude oil market. For the first time in decades the United States has been able to export as much crude oil as they want. So, instead of the market taking a tail spin in October, November, and December, this year, large exports left the United States. That, along with cuts from production from the OPEC nations has propelled the market to heights not seen in approximately three years. That did stop us out of some of our crude oil recently. We are going to change the parameters on crude oil. We think it’s still going to be kind of a sideways market over the next year or two but, we do have some of the definitive bearishness that takes place in winter each year, probably alleviating. So, the deep sell-off that takes place in the fourth quarter with now large exports leaving the United States, those might be a thing of the past. We’re going to be adjusting our parameters on the price of crude oil going forward. We now think that petroleum prices are likely also a fair value market – practically a widget if you will – especially with the United States about to produce ten million barrels a day. That will keep large spikes up in price from happening, as well.

Anyone wanting more information from OptionSelle(continued)

Michael: Hello everyone. This is Michael Gross at OptionSellers.com here with your podcast for October 27, 2017. Well, we marked the thirtieth anniversary of the stock market crash of 1987 this month. With stocks hitting new highs every day, a lot of investors are asking that same question – can it happen again. Some people say no, some people say yes but, an interesting prospect comes into play here with the news on tax reform. Will tax reform get passed? How will that affect the stock market? [I’m] here with James Cordier our head trader. James, welcome to the show.

James: Thank you every much, Michael. Good afternoon to you.

Michael: James, what’s your take on this. Everybody’s building up to tax reform – how it could affect stocks, if it does or doesn’t go through. Do you have a viewpoint on this right now?

James: Michael, the discussion about tax reform is certainly extremely business-friendly. Practically all facets of the U.S. economy would likely benefit from this and of course bringing overseas dollars back to the United States, allowing companies to generate more income through investment as well as the one-percenters that sometimes sit on their hands when taxation is too high, a great number of these things could be alleviated if tax reform goes through. Certainly, I think, that’s what a lot of the bullishness is with the stock market right now. It’ll be very interesting to see the next thirty days how that plays out and then what the stock performance is after that.

Michael: I saw this month that Goldman-Sachs projected there’s a sixty-five percent chance tax reform gets passed in 2018 but, there’s also some dire warnings what could happen to stocks if it doesn’t get passed. Do you think there’s a built in assumption right now in equities that this does go through and if it doesn’t, there’s going to be some disappointed bulls out there?

James: I think so. Certainly, the stock market is forward thinking and they are looking at tax reform in the very near future, probably the first half of 2018 like you mentioned. There is no question that the stock market is at precarious levels. If it continues to get positive forward thinking, no reason why it can’t go up but, sooner or later, it’s going to get a dose of medicine that it may not tolerate and tax reform not passing would certainly be one of those possible culprits.

Michael: Alright. Certainly something to watch over the next several months. Let’s hope we can get it done. Topic for this month’s podcast is two markets for year-end positioning and, we’re going to talk about a couple markets here that probably don’t care much about what happens in stocks. They’re completely uncorrelated. As we know from anybody that’s listened to us or read our materials we trade commodities primarily because that non-correlated aspect to stocks and each other. Primarily answering to their own supply-demand fundamentals. Out first market this month we’re going to talk about is the natural gas market. James, this is a market you’ve talked about here previously – the last month or two. But now we’re coming into the time of year where a lot of small speculators, people that aren’t real familiar with commodities often think of kind of that pop analysis, ‘boy, I should buy natural gas heading into winter because it’ll probably go up.’ A good article you wrote this month about that says maybe you want to do just the opposite. Do you want to talk about that a little bit?

James: Michael, it’s interesting natural gas just has incredible historic volatility. With hurricanes that came into the Gulf of Mexico several years ago and then some extreme winters that we’ve had a few years ago as well, and that has brought investors looking at things like natural gas going into the winter season. The last few fourth quarters in the United States have been relatively mild. That is one of the reasons why natural gas is down this year going (continued)

Michael: Hello, everyone. This is Michael Gross at OptionSellers.com. We are here with your monthly podcast for August 25th, 2017. I’m here with James Cordier. James, welcome to the show.

James: Thank you, Michael. I’m always glad to be here and share our knowledge and wisdom.

Michael: Excellent. Well, we are here in the last week of August and we are heading into Labor Day weekend and right around the corner is, of course, September. A lot of people come back from vacation, a lot of traders come back into the fold, and often times we find out where we really stand in a lot of markets that may have drifted one way or the other during the summer. Right now, as we look at stocks, kind of off a little bit. From the beginning of August we’re down, although up a little bit early in the week here at time of recording. We’ve had a little push downwards and, James, I know you addressed this in your bi-monthly address to clients on video, but do you want to talk a little bit about what might be going on right now in equities?

James: Yes, Michael. The equities market, as everyone knows, has been hitting all-time highs throughout the first 6 months or so of the year; however, just recently, a bit of a speed bump with just absolute chaotic times right now in Washington D.C. A lot of the Trump ideas that helped get him elected, which propelled the stock market recently, are in question. Tax relief and de-regulation and 0% interest rates all might be influx right now, and, certainly, a lot of the reasons why people were buying stocks over the last several months were these very business-friendly ideas. I wouldn’t say that they’re gone and out for sure, but certainly they’ve taken a back seat to just simply getting Washington squared away. Hopefully these ideas will come back because they definitely are business friendly. While we’re not in the stock market, we certainly do root it on, because I’m sure a lot of our listeners and a lot of our clients do have stock holdings, so we’re always rooting for it. It has taken a little pause here for certain reasons, and a lot of them are some of the goings-on right now in Washington D.C. Hopefully it’ll get straightened out before too long.

Michael: Yes, obviously this market is still in a bull market. There has been no bottom falling out and there may still be some reasons to buy the stock market. Just some interesting stats I saw was that as of earlier in the week here, on the whole year the S&P was up about 9%- not too bad, but certainly off the highs. Interesting note, James, the Russell was even on the year- no gain at all.

James: Right. I noticed that, and a lot of the ideas of deregulation and, you know, lower taxation, that should be helping the small caps. The Russell being basically even on the year really does bring into the question is “How broad is this rally?” Certainly, the Dow Jones, basically we cherry-pick 30 stocks and the ones we like we put in there and the ones we don’t like we take out. Certainly, the Dow Jones has done extremely well, but some of the larger gauges of the stock market, like you said, are unchanged or up a percent for the year, and I think that was an eye opener to a lot of investors that saw that in the news here recently. I know it was to me, as well.

Michael: Well, I’m just glad, James, that you and I don’t have to forecast the stock market because that’s certainly too many moving parts there for me. I know you feel the same way.

James: Likewise. I really enjoy investing our client’s money and talking to our listeners today based on fundamentals of 10 commodities that have been around here forever and will likely be consumed for years and years to come.

Michael: On that note, why don’t we talk about something we do know quite a bit about and that would be autumn seasonals, which is the topic of our podcast this month. We’re going to talk about a couple commodities here that we do study very closely and maybe do have some ins(continued)