Coffee Traders' Forum - A Discussion about Coffee Futures Trading
Coffee Traders Discussion Forum
Options Review End of Day 3-13-18
*Coffee finally had some movement today as it broke out of its mini ranges. Today’s 305-point range, which was greater than 2.5% of the contract value, proved that Coffee can still have a bit of a move. While options volume was similar to recent activity, there was a bump in implied volatility. Most of that, however, was due to the higher at the money strike. CSOs traded in Sugar 800 times in the October/March -1.00 puts as the spreads continued to come in. Unfortunately, CSOs in Arabica didn’t trade and Robusta CSOs are shown below. Full options info is in the table below. If you’re not getting the info, please make sure to get on our email list.
*Highlighted Trades Today:
500 Sep18 140.00/170.00 call spread vs 124.15Δ20 traded 2.11. 200 Jul18 125.00/150.00 call spread vs 121.80Δ36 traded 3.12. 150 May18 122.50 calls vs 121.15Δ38 traded 2.42 20.77 IV.
200 Sep18 160.00 calls vs 125.50Δ12 traded 1.28 29.31 IV.
100 May18 117.50/120.00 (2x1) put spread traded .20 vs. 121.25. 250 Nov18 -10 put traded 7 vs. -4/-3.
Until Coffee can show some significant short covering it will be difficult to make a substantial move to the upside. The KC U18 122.50/117.50/112.50 Put Tree which is priced at around 57-tics might make an interesting position to put away for a few months if you believe that the market will continue to be stuck in a range. Time is on your side and the natural flow of carrying charges will assist with the position (all other things being equal).
Sugar made an excellent move to the downside and the spreads came in as well. Given the shorts in that market, it may be time to start considering a position utilizing the spreads in anticipation of the roll. Although May options have another 23-trading days, the May/July CSOs should be quite interesting.