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

Courtesy: H&M

Apparel/Garments | On 30th Mar 2017

H&M group's sales increase 7% in 3 months to Feb '17

The H&M group's sales including VAT amounted to SEK 54,369 million...

Textiles | On 30th Mar 2017

India Inc should work for July 1 GST roll out: Fin sec

The Goods and Services Tax (GST) will take India into a very exciting ...

Textiles | On 30th Mar 2017

Azerbaijan cotton industry created 64,000 jobs last year

Cotton industry in Azerbaijan created 64,000 jobs in 2016, and a...

Interviews View All

Victor Chao
Esmetex

‘In future, clothing boundary lines will become increasingly blurred.’

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

Amit Jain
Shingora Textiles Ltd

‘In terms of fabric, the fastest growing category for us is a blend of...

Lynda Kelly
Suominen Corporation

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

Urs Stalder
Sanitized AG

Urs Stalder, CEO, Sanitized AG, talks about the increasing use of hygiene...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Mike Hoffman
Gildan Activewear SRL

Gildan Activewear, a manufacturer and marketer of branded clothing and...

Madhu Jain
Madhu Jain

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

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

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
March 2017

March 2017

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

SUBSCRIBE


Browse Our Archives

GO


eNEWS
Insights
Subscribe today and get the latest News update in your mail box.
Advanced Search