CRInvestor

Sugar Weekly Analysis - 'value' trade?

ICEUSA:SB1!   Sugar #11
167 4 0
While the stock market has done well over the past few years, not all assets have been in bull markets. Many of the 'soft' markets have been just that. But those days may soon be behind us as one by one, the sector looks to be turning the corner. While it is still very early, there are some signs of life within the international sugar             market. Considering the substantial potential gain of a move back to the OTE             short sweet spot of this bear market, I am more than happy to entertain the idea of long dated call option purchases and even a bit of bottom hunting within the futures pits. 17.29 seems to stand out and should be an interesting level to keep an eye on going forward.
JavierB
3 years ago
snapshot
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After some thought, it occurred to me that this is a classic CRI's OnlyDoubles Trade Idea. Indeed, one can go and buy a 1 year option on #11 Sugar and literally 'lock in' a position on this commodity for relatively little money. For OnlyDoubles blog purposes, I like the October, 2014 $20 call options currently at 42 points (at $11.40/ point that equates to $478.80). Should the market go back to our '1st stop' target, this option will have an intrinsic value of 250 points (or $2850). Considering too, this is a one year option, there is lots of time for this idea to play out....
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CRInvestor PRO CRInvestor
3 years ago
correction....those $20 calls are 46 points (or $524.40) not 42 points mentioned above.....trade still looks good
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Sugar prices have exploded higher and so too have the October, 2014 $.20 call options. They finished Friday at .82. Just 29 days ago I wrote about how attractive those calls were at $.46...One should have open orders to sell half the position at double your purchase price (hence the reason why I added it to my OnlyDoubles trade blog) or around the .90 area....
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