Soybeans Face Critical Test Tuesday
Volatility bubbles over as options expire and delivery begins.
Bryce Knorr
Published: Jun 29, 2009
Friday's end to July options in soybeans had the look of a tea kettle getting ready to boil. Nearby futures traded back and forth on either side of the $12 strike, finally being settled at $12.01. Now, with options expired, traders are wondering if it's finally time for the bean pot to boil over as it enters delivery.
The first salvo came late Friday afternoon, as those holding $12 options had to decide what to do with them. Some 46 in-the-money $12 calls were abandoned, while 277 out-of-the-money $12 puts were exercised, a bit bearish.
The next decision comes money, when longs must decide whether to stay in the game into first notice day on Tuesday. No contracts are registered for delivery, and basis remains well above option with July holding a 73-cent premium to August. While open interest in July dropped by more than 30%, it's still double that of a year ago. July/November made new highs Friday, closing at $2.10, setting the stage for the final squeeze.
Check out the Weekly Soybean Review.
Permalink: Click here
Tagged: soybeans, soybean, weekly soybean review
|