Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Hi JK. April options are expiring today. I can only speak for myself as each trader has different intentions on how to deal with their options. If the market is below 120.00 at any time today I will buy against my puts. If the market then rebounds above 120.00 I will liquidate my hedge. The put short will need to decide what to do with his potentially long futures position, especially if the market drops below 120.00. The put shorts may be commercial or market makers or whatever. If commercials it is probable that they are happy with being long futures at 120.00. Market makers may not be so eager. As we saw during the last expiration period, as the market traded through the several strikes in the days prior to expiration, selling intensified significantly partially due to the short put sellers of futures. If I were short 120.00 puts I would likely put a stop somewhere below the strike depending on the intensity of the weakness. The May options are still being guided by the greeks and will likely continue in this manner until maybe a week prior. Every trader is different of course.