Head of Commodity Strategy
Summary: A significant speculative short-covering potential has emerged in cotton after hedge funds have driven the net-short to the highest since May 2007 following 30 weeks of selling.
Instrument: May19 Cotton option call strike 75: OCT/K19C75:icus
Price Target: 80.00 cents/lb
Market Price: 74.30 cents/lb
Entry: Buy the 75 Call on May Cotton, ticker: OCT/K19C75:icus
Stop: Use limit orders
Target: 80 cents/lb on CKZ8 (representing an intrinsic value of $2500 minus premium paid plus remaining time value)
Time Horizon: Before option expiry on April 12
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