Home / Knowledge / News / Textiles / ECOM daily cotton market report
ECOM daily cotton market report
05
Mar '08
Wow, who's idea was it to get rid of the floor brokers? Two days and two locked up limits as Z'08 reached 109.00 synthetically soon after options opened and served as the first spot for shorts to stop the bleeding. We are now seeing an historic squeeze on the commercial shorts as margin calls close to 10 cents per contract were digested overnight.

For those who are not familiar with synthetic trading, when the futures market locks up the limit, you can still buy the market by purchasing the at the money call and selling the put at the same strike price. Basically, the premium you pay for the call over the put added to the strike price will give you the purchase level.

This was how the majority of buying has taken place the last two days as hedge funds have had to do very little and been able to ride the market higher based on the forced liquidation of many commercial shorts unable to cover margin calls.

Ironically, this type of short squeeze also happened in wheat about a month ago when we traded over 20 dls/bu synthetically while expanded limits kicked in, but the physical futures price in Chicago never broke 12 dls/bu.

There was actually a bearish rumor from China in the wheat market today which broke the rally in grains and contributed to a late morning pull back in cotton which allowed us to trade electronically for the first time this week.

However, it did not last long and we were soon back to trading synthetically with May, July and December all trading in the triple digits! With such high volatility and panic buying and selling today we created a 20 cent trading range from the open to close in options.

Must ReadView All

Textiles minister Smriti Irani at a press conference with minister of state for textiles, Ajay Tamta, the principal director general (M&C), PIB, AP Frank Noronha and other dignitaries. Courtesy: PIB

Apparel/Garments | On 23rd May 2017

Special package for knitwear coming soon: Irani

Union textiles minister Smriti Irani said that the government of...

Apparel/Garments | On 23rd May 2017

Apparel, footwear use may rise by 63% in 2030: Report

The apparel and footwear consumption is projected to rise by 63 per...

Apparel/Garments | On 23rd May 2017

Gap Inc earns $3.4 bn in net sales in Q1 FY17

Gap Inc's net sales for the first quarter of fiscal year 2017 were...

Interviews View All

Ghanshyam Ghoghari
Kimora Fashion

Bridalwear is not about reds and whites anymore

Amrit Sethia
SOIE

‘The intimatewear category in India is slowly becoming trend-sensitive.’

Frank Gossmann
Rotorcraft AG

‘RT3 motto is: Do not check millimetres, check colours.’

Lynda Kelly
Suominen Corporation

Suominen Corporation is a manufacturer of nonwovens as roll goods for...

Eric Scholler
Groz-Beckert

The Indian market has huge potential in technical textiles, and by far,...

Giorgio Mantovani
Corman S.p.A

Giorgio Mantovani, MD of Corman, with a presence in both Milano and New...

Madhu Jain
Madhu Jain

She grew up in the walled city of Old Delhi, completed her studies, and...

Bani Batra

Bani Batra’s couture wedding collection is inspired by traditional Indian...

Judy Frater
Somaiya Kala Vidya

Among the many honours showered on Frater, including Fulbright and Ford...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search