Bean Option Recap

Beans traded higher overnight as the few weak shorts who did not throw in the towel yesterday did so last night.  However, as it became apparent that this rally was only a function of flushing out those who could not tolerate the volatility, sellers hit the market and sold it off to more reasonable levels.  I believe we will look back at the rally this week as one of the better opportunities of the year to short this market.  There have been nice risk/reward option trades in puts available to initiate a short bias position over the last couple of days.  As we continue through harvest and yields have generally been very favorable I am seeing those in the know looking further and further down the skew as a possible destination.  I believe it will happen in two waves.  The first leg down will come over the next couple of months and then if the South American crop does not run into any trouble there will be another leg down after the first of the year.  Some are looking for a complete washout sooner rather than later.  I don’t think it will happen that fast.  We will know more on Friday.  SX vol 25.75 down .5, SZ vol 23 up .75, SF vol 21.5 up .75, SH vol 21 up .5.

 

Straddles

SX 940 41-42

SZ 940 60.5-61.5

SF 940 75-76

SH 960 97-98.5

 

 

ADM Sold 200 Mch 980 Calls 37-37.25

DRAX Sold 300 Nov 900 puts/ Sold 300 Nov 960 Calls 18.25-20.5

FC Stone Sold 500 Jan 860 Puts 10.5-11.125/ Sold 90 Jan futures 942.5-948

Macquarie Bot 300 Nov 920 Puts/ Sold 600 Nov 890 Puts 2 db

EDF Bot 300 Jan 870 Puts 12.5-12.75

ADM Sold 300 Dec 940 Calls 35.25/ Bot 200 Nov futures 941

Macquarie Sold 200 Jan 1000 Calls 15.5/ Bot 60 Jan futures 946

DRAX Bot 500 Dec 900/850 Put spds 8.375-8.5 db/ Bot 70 Jan futures 946

ABN Bot 400 Jan 870 Puts 12.5-13.625

DRAX Sold 1000 Nov 900 Puts 8.25-8.375/ Sold 245 Nov futures 946.5

Citigroup Bot 150 Nov 920 Puts/ Sold 300 Nov 890 Puts 1.75 db

Citigroup Bot 200 Dec 930 Puts/ Sold 400 Dec 890 Puts .75 db

Rosenthal Sold 350 May 1020 Calls 30

ICAP Bot 500 Nov 920 Puts/ Sold 1000 Nov 890 Puts 2.25 db

Rand Bot 500 Dec 900 Puts 16

ABN Sold 250 Nov 980 Calls 4.75

Rand Bot 200 Mch 900 Puts 28.75

ABN Bot 2500 Jan 910 Puts/ Sold 5000 Jan 800 Puts/ Bot 2500 Jan 690 Puts 18 db

Dowd Wescott Bot 3500 Mch 800 Puts 8.375-8.75

TJM Sold 500 jan 900 Straddles/ Bot 500 Jan 940 Straddles 7-7.5 credit

TJM Bot 200 Mch 900 Puts/. Sold 400 mch 840 Puts/ Bot 200 Mch 780 Puts 7.25 db

ADM Bot 1000 Mch 820/800 Put spds 2.5 db

ADM Sold 250 Mch 800 Puts 8-8.5

JP Morgan Bot 500 Jan 900 Puts 21.5/ bot 160 Jan futures 940

JP Morgan Bot 250 May 1220 Calls 4.25

JP Morgan Bot 250 May 1240 calls 3.5

FI Sold 20-0 mch 800 Puts 8

Jefferies Bot 200 Jan 930 Puts/ Sold 300 Jan 880 Puts 9 db

 

 

Jon Karmin (JSK)/Jeff Pogonitz (POG) Brokerage

 

Data source: Jon Karmin and Jeff Pogonitz bean option brokers