The models are broken
The market is trying to get back to the pre-Covid and pre-war times, but that model is broken. A new dawn is here and the financial world needs to adapt.
Steen Jakobsen,
Chief Investment Officer
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