So who wants to go short Cotton?
Opening higher in screen trading then dipping as the outcry opening arrived, cotton prices held. In fact they didn’t really look very good at that point, but then they started to firm. Not moving sharply, but rather moving methodically, cotton prices gathered steam and momentum from fund buying and option trades and eventually moved up the maximum, going limit bid in all months, and trading synthetically at 7910 in May before backing off then returning to limit bid prior to the close.
Option volatility firmed and Dec options were 28% bid. Option transactions are hitting fast and furious and fueling further action and volatility. Therefore, you really don’t want to be short options unless they are covered in some manner. Now many in the cotton trade regardless of the reduced planting situation are skeptical and leery of the strength in the market. Some might even express their bearishness. However, if the dramatic rally hasn’t caught your attention let me tell you it is going to continue. You may even begin to hear stories about margin calls causing positions to be covered. And that will only serve to push this thing higher still.
You see the funds aren’t through with this thing yet. They aren’t using this market in the traditional sense, (say for instance price discovery). They are pressing the pedal to the metal and putting vast quantities of money in play. And they have lots more money than merchants do cotton. They consider cotton prices are cheap when compared to other crops, many of which they have already made huge profits in and some which soared again. Sure cotton prices are at their highest levels in five years, but March Spring wheat in Minneapolis reached $23.15 today! There really is no fundamental reason for that is there?
Buy cotton, especially on dips and hold it as prices have only begun to fight higher.
Si quiere más información, por favor contáctenos,
Maria Aranda
El equipo de Brokers de Futuros USA
Email: [email protected]
TEL: 312-261-7395
Fuente: MF Global
©2007 Jurgens Bauer & Associates all rights reserved.
Jurgens Bauer
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La operación de futuros y opciones involucra riesgos de pérdida sustanciales, por lo que no es conveniente para todos los inversionistas. La información y opiniones contenidas en esta publicación, no constituyen, ni deben ser interpretadas para constituir una oferta de venta o la solicitud de compra de algún producto. La información objetiva incluida en este reporte ha sido obtenida de fuentes consideradas como confiables, aunque no esta garantizada en cuanto a su exactitud, ni tampoco en lo que respecta a su completo significado. No se asume responsabilidad con relación a ninguna declaración, así como en lo concerniente a cualquier opinión expresada aquí incluida. La confiabilidad relativa a la información en este reporte es solamente bajo riesgo del lector. Todos los comentarios están basados en opiniones.
