Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Options Review End of Day 3-7-18
*If you like volume, then the July 17/18.50 call spread in Sugar, which traded .02 5,650 times early this morning, was worth looking at. Unfortunately, in the larger scheme of things, it was probably just the rolling of a position. This trade helped make Sugar options reach a lofty volume of 39,000 plus on a day. Sugar’s 4.5% decline on the day was quite surprising to those who were short April options. Other than Sugar, the only notable trades were in Robusta Calendar Spread Options. The underlying spread is moving and the options are trading. It is significantly more interesting than Coffee options and their CSOs. Unfortunately, a 165-point range in Coffee continues to leave people on the sidelines.
*Highlighted Trades Today:
200 Jul18 130.00 calls vs 123.00Δ34 traded 2.85 22.03 IV.
100 May18 125.00 calls vs 121.20Δ35 traded 1.90 21.63 IV.
250 Jul18 125.00/110.00 fence (to the call) vs 122.60Δ50 traded 3.50. 250 May18 130.00 call traded .88 vs. 120.60 23.90 IV.
550 Robusta 1-Month CSO Jul18 -5 put traded 7 vs. -2.
100 Robusta 1-Month CSO Jan19 -15 put traded 10 vs. -11.
700 Robusta 1-Month CSO May18 -5 call traded 9 vs. -18.
Weeks ago, we discussed a July 120/115/110 put butterfly which you could purchase for 68-tics. It was intended to take advantage of the movement in the underlying commodity due to the carrying charges coming off the board. While the trade is not a bonanza, it is currently worth 88-tics, it is an interesting way of taking advantage of the cost of carry if your assumption is that the market will remain in a range. Maximum risk for the trade was 68 with a maximum profit, that would never happen, of 432-tics.
Yesterday the discussion was of Relative Strength. Today, Soybeans seemed to run into a bit of resistance and as of this publication was lower on the day. With a report tomorrow, trading in the Grains should be interesting. Beware of implied volatility changes. It can be hazardous to your position. The second table below provides select Grain options information which may be useful in advance of tomorrow’s report. Pay close attention to the relationship of implied to historical volatility and be prepared to see the differences in tomorrow’s sheet. Keep in mind, there is another Grain report at the end of the month.