Sugar Options Commentary 9th March 2010
Published: 03/09/2010, 6:44:00 PM
J&C Commodities
Sugar Options Commentary
9 March, 2010
- Paper bot 1500 K 2500c @ 21
- Paper bot 1500 K 2800c @ 9
- Paper sd 1500 K 2000p @ 85
- Paper sd 1500 K 2100p @ 135-140
- Paper sd 500 K 2100p @ 143 vs K=2060
- FC Stone sell 750 V 2000c @ 155-157
- FC Stone sell 500 H 2000c @ 165-167
- J&H bot 500 H 20/25 calls @ 93
- JPM sell 1000 V 2000c @ 150
- FC Stone buy 1500 K 23/25 call spreads @ 24-25
Commentary
The market has an agenda and it has no time to try and factor in anything that could possibly be supportive. Egypt's overnight purchase of 90 KMT means nothing and traders are caught up in the collapsing London/NY Arb as well as the perception that Fund's liquidation of 34% of their longs over the past 2 weeks really is not sufficient to halt the downside. Also adding to the "presumed guilty" mentality are the upward revisions of India Crop. On the technical side, the market was teetering on shaky ground with K=2050 as a key support level dating back from September. Traders tried their best to push through this downside to elect stops and hit the plunge button.
In the options, we saw large scale selling of V 2000c with probably close to 3000 sold all day between 2 brokers. Otherwise, we saw what appeared to be massive book clearing again with size being bought back in K 25 and 28 calls as well as selling in the K 20 and 21 puts. Towards the end of the day, paper bot 1500 K 23/25 call spreads @ 25.
The close below 2130 makes the market look worse than it already is. For those of you who believe strongly in charts, say hello to K=1975. Same idea, market just can't get out of its own way and each day the collapse continues. Traders' confidence is shattered and no one wants to be the proverbial hero and step up to buy.