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 | On 20th Jan 2017

TEA expects budget to upscale textile skill industry

The Tiruppur Exporters’ Association (TEA) has requested the Central...

Textiles | On 20th Jan 2017

Bangladesh could earn $60 billion in exports by 2021

Bangladesh is expected to earn over $60 billion in exports by the...

Courtesy: PIB

Textiles | On 20th Jan 2017

Govt to help Tangaliya weavers purchase looms: Irani

Government of India will facilitate Tangaliya weavers in purchase of...

Interviews View All

Rashi Menda
Zapyle

Every fifth sale we make on Zapyle is a repeat purchase

Jurgen Gauger
Spreadshirt

‘Buying crowdsourced or creative designs are much more appealing to the...

Akash Khetan
Narayan Tex Fab

I find it hard to find professionals in Surat

Suresh Patel
Sidwin Fabric

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

Urs Stalder
Sanitized AG

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

Kai Poehler
Voith Paper GmbH & Co. KG

The glass mat industry is growing by five to eight per cent annually. Kai...

Bani Batra

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

Robert Brunner
Devereux

Golfwear and menswear brand Devereux is set for greener pastures. Robert...

Sonam & Paras Modi
SVA

Sonam and Paras Modi's Sva Couture is synonymous with head-turning...

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
January 2017

January 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