Talks, Soybean Trade Flows Adjust. Visit other softs at orange juice future , cocoa future , sugar future , coffee future. Prices Surge on Late-Day Support
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Cotton futures and cotton options contracts trading has gained quite a lot of volume over the last few years as more people learn about how cotton futures along with other futures contracts have a place in many aggressive investors' portfolios.
A cotton call option gives the purchaser the right but not the obligation to purchase the underlying futures contract for a specific time period and a specific price strike price. Let's say that you wanted to purchase an October. This means that you bought the right but not the obligation to buy 50, pounds of October cotton for. Of course, very few options are bought for the purpose of taking delivery but that is one potential outcome.
Chances are that you either bought the cotton option to hedge your price risk in the physical cotton market you may be a cotton farmer or and end user of cotton like a textile mill or you are speculating that cotton prices will go higher in an attempt to make a profit. A cotton put option gives the purchaser the right but not the obligation to sell the underlying futures contract for a specific time period and a specific price. Let's say that you wanted to buy an October cotton.
This means that you have the right but not the obligation to sell 50, pounds of October cotton at. The delta factor of an option represents the estimated percentage of change an option will receive based on the movements in the underlying futures contract.
Let's assume the October cotton. Options are wasting assets which means that they lose value as time passes. The theta of an option is the measure of time decay. Let's assume that you bought an October cotton. Let's also assume that the cotton futures prices have moved very little over the last month and are exactly the same price 30 days later.
Your option will have lost 30 days worth of time and therefore will be worth less today that it was when it had 60 days left until expiration. Vega is a measure of the implied volatility of an option contract as it relates to its underlying futures contract. For instance, if the underlying futures contract is extremely volatile then the implied volatility of the options of that futures contract will be affected. In a high implied volatility environment option premiums tend to expand.
Conversely, in a low implied volatility environment the option premiums tend to decrease. Trading Unit - 50, lbs. Trading Hours - 9 pm to 2: Price Quotation - Cents and hundredths of cent per pound. Trading Months - Current month plus one or more of the next twenty-three succeeding months. March, May, July, October, December. Futures Ticker Symbol - CT. Spreads may always trade and be quoted in one point increments, regardless of price levels.
Last Trading Day - Seventeen business days from end of spot month. First Notice Day - Five business days from end of preceding month. We continue to believe that AgFax. Com is an invaluable resource to producers and to the overall industry and we will continue to keep it bookmarked and check it regularly. The bulls posted their second consecutive weekly win, with the ICE Dec contact picking up 59 points, finishing at The Dec — Mar spread weakened on the week, but remains at far less than full carry at 36 points.
The market again found support this week just above its recent lows. The latest on-call report from CFTC evinces that mill fixations of outstanding basis purchases have continued to lend support to our market. Too, the market reacted positively to the recent tentative US — Mexico trade agreement and the likelihood that a US — Canada agreement is nearing completion.
Weather continues to be a potential issue in the North Delta, with locally heavy rains causing isolated problems, despite overall excellent conditions in the region. Like the Southeast, the most troubling potential issue is rain on partially open bolls leading to boll rot, but the 5-day forecast looks favorable for drying and opening. Demand for US cotton for export increased somewhat over the most recent sales period. We think that the recent religious holiday associated with the Muslim faith likely affected sales figures put forth this week.
However, China continues to be a major purchaser of US cotton. Consider fixing cotton at or above 85, but go into harvest with free cotton to sell on rallies that approach 90 or if basis improves for higher grades. Important stories to watch in the next few weeks include progress on trade talks, the likelihood of a farm bill by months end, and the September WASDE. Hedging a crop with options is the single most effective thing you can do to reduce risk and improve the odds of being in the game when profit potential presents itself.
For next week, the standard weekly technical analysis for and money flow into the Dec contract remain bearish, but the market also remains in something of a technically oversold condition. A significant amount of physical support likely remains under the current market. Further out, Farm Futures magazine has projected, via its preliminary survey, area committed to cotton of more than As the winter wheat planting season approaches across the southern US amid a bear soybean market, we can envision a plausible scenario for US cotton acreage sown to cotton to be significantly above 14M acres.
Identify opportunities, make informed decisions, execute quickly. Technology and integration tools for efficient data management. Description Contract calls for physical delivery of cotton of certain minimum standards of basis grade and staple length. January, September and November. The underlying future for the September and November serial options is the December futures contract; the underlying future for the January serial option is the March futures contract.
Cotton Options trading may be halted under certain market conditions.
Regular Options: March, May, July, October and December; Serial Options: January, September and November. The underlying future for the September and November serial options is the December futures contract; the underlying future for the January serial option is the March futures contract. Free intra-day Cotton #2 Futures Prices / Cotton #2 Quotes. Commodity futures prices / quotes and market snapshots that are updated continuously during trading hours. MidCurve Options: Eurodollar Mid-Curve options are short-dated American-style options on long-dated Eurodollar futures. These options, with a time to expiration of three months to one year, have as their underlying instrument Eurodollar futures one, two, three, four or five years out on the yield curve.