Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Options Review End of Day 2-28-18
*The books are closed on February. The high May Coffee was 126.50, the low 118.55. The trading seemed less interesting than that. The majority of the time was spent between 120 and 125. For those in the industry, price stability is fantastic. For the speculating public, it is time to move to more interesting markets. As you can see from the highlighted trades below, there was approximately the same volume in Robusta options as Arabica, with Arabica trading less than 1,000 lots more than Robusta.
*Highlighted Trades Today:
1725 Robusta Jul18 1750 calls vs 1750Δ50 traded 75/76 19.51 IV.
500 Robusta May18 1800/1700 fence (to the put) vs 1720Δ68 traded 18. 200 Robusta 2-Month CSO May18 -35 put traded 13 vs. -34.
250 Robusta 2-Month CSO May18 -30 call traded 14 vs. -33.
150 May18 120.00/122.50 call spread vs 121.80Δ12 traded 1.15.
200 Jun18 127.50 calls vs 123.20Δ38 traded 2.87 20.76 IV.
Once again, Coffee had a miniscule range; 185-points. The only market that was interesting was Robusta CSOs. The curiosity surrounding the May/July Robusta spread has set the May CSO series up for significant intrigue. Given the new rules in the contract, the are differing opinions as to where that spread could end up. If the March/May spread is any indication, it could be one crazy spread.
It didn’t take long for Sugar to turn around. Today’s trading, at the highs, completely reversed yesterday’s losses. Wheat and Sugar had ranges in excess of 5% on the day and showed that volatility is still prevalent in some commodity markets. A recommendation was made for the Cotton market by one of the Clearing Members: it’s a Seasonal Spread which is Buying Dec Cotton and Selling Jul Cotton from a set of back-tested dates using 3/24-6/7 and was profitable 14 of 15 years with an average profit of $2516. Interestingly the Cotton 2-Month CSO Jul18 7.00 call traded 2.00 150 times today versus the July/December spread trading around 6.10. Analyzing it may be worthwhile.