Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
As anticipated, the OI dropped as a result of short covering and long liquidation. Let’s not forget that below 129.50 systems were still selling new while other specs covered. Below this trigger level the OI would have been flat. Today, we have a market where systems are constant buyers while sellers are sporadic but sometimes overpowering. The market has just made new highs and is looking steady. Buying dips is still on the menu. A trade took place today that has the option community puzzled. 4,000 lots of the March 170.00/180.00 call spread were bought at 40+ premium by a customer from market makers. The trade was accompanied by a 120 lot short position by the client. It had little if any impact on the market and its purpose remains a mystery. BRL is 3.1700 +.0145. The bond market is closed today and so futures are quiet and flat.
In RC we see a roll from Nov to Jan which is the reason why the spread is firm. Even if spec is buying the spread, commercials are not getting in the way of the premium market.