Bean Option Recap From Jon Karmin 04-02-15

Beans traded lower overnight and rallied back most of the day until the short squeeze capitulated and then we broke late.   I don’t see us going much anywhere in the near term possibly 25 cents either way.  The low trading vol is certainly telling us the same.  It is very tempting to jump in at these low levels but I don’t see a lot to be made the next couple of weeks being long vol.  However, these cheap vol levels do provide the opportunity to take in some premium if you happen to be short any.  More significantly, the SN/SX spread continues to deteriorate as I believe farmers are letting go of remaining ’14 beans in storage as the mentality now is looking toward the new crop.   We have seen attractive prices the last few sessions from the mild rise in the nearby futures and the farmer should be closing the books on 2014 in my opinion or he will end up releasing at much cheaper prices.

 

Bean vol:

May vol 15 ¼ down ¾

June vol 16 ¼ down a ½

July vol 17 ¾ down a ¼

Nov vol 19 ¼ down a ¼

 

Bean ATM straddles:

May 990 str 29 ½ -30 ½

June 990 str 47-48 ½

July 990 str 68-69 ½

Nov 980 str 110-112

 

Bean players:

Drax Sold 350 May 950 Puts / Bot 175 May 1000 Calls even/ Sold 122 May Futures 982

FI Bot 500 May 970 Straddles / Sold 300 Jul 960 Puts/ Sold 300 Jul 1100 Calls 80 db/ Sold 200 May futures 982

Rosenthal Bot 200 WK2 990 Calls 7-7.5

Rosenthal Sold 700 SDFN 950 Puts 21.5-22

Obrien Bot 500 June 1040 Calls 7-7.5

Marex Sold 250 Aug 1000 Calls/ Bot 50000 Aug 1060 Calls 1 credit

Jefferies Sold 800 Jul 940 Puts 12.75-14.75

Jefferies Bot 200 June 1000 Calls/ Sold 200 Sep 900 Puts 1.25-1.5 db

Drax Bot 1000 May 940 Puts 2

FI Sold 500 May 950 Puts/ Sold 500 May 1100 Calls 11.5 credit/ Sold 60 May futures 981

 

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

 

Data source: Jon Karmin and Jeff Pogonitz bean option brokers