Sugar Options Commentary 11th March 2010
Published: 03/11/2010, 10:07:00 PM
J&C Commodities
Sugar Options Commentary
11 March, 2010
- S&P sold 1500 K 2000p @ 150-160
- B&D bot 2000 K 2500c @ 12-13
- B&D bot 2000 N 1500p @ 34-37
- FC Stone bot 1000 K 22/25 call spreads @ 29-30
- FC Stone bot 2000 N 1800p/sd 2000 N 2000c @ 30-33
- paper to paper 50 V11 1600 str/50 V12 1500 str @ 55 with v11/v12 @ 100 (for those of you tracking the back part of the curve)
Commentary
The best thing that could have happened for the market was to see a relatively quiet day (as in no triple digit moves). With a decided lack of trade house buying, we saw fund liquidation become the cause of declines that would make even the most senior traders cringe. Now, with the most recent open interest showing an INCREASE of 5000 in K, we are seriously wondering if somehow funds are going short or if the Open Interest Statistics reflect the movement very accurately. Certainly, the general perception of the market is that absolutely nothing has a positive spin and if the open interest does reflect new shorts, then may as well say hello to 1500.
In the options, we saw more profit taking in the K 2000p by the large fund. Also, paper bot 2000 N 1800p/sd 2000c as a bear fence. We saw something interesting in V2011/2012 straddle spreads as small size in the V11 1600 vs V12 1500 straddle spreads traded @ 55 points. We have a feeling more of the players involved in the OTC side will be trying to sell the V2012 because they feel collecting 500 points for an implied range of 1000-2000 for V2012 isnt a bad play.
Let us see several consecutive days when the market can stay somewhat range bound before we can feel positive about the market outlook again.