‘Overpriced’ Coffee Options Poised to Fall: Technical Analysis
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Coffee traders should sell “grossly overpriced” options on New York futures to take advantage of a recent rally, said James Cordier, a portfolio manager at OptionSellers.com in Tampa, Florida.
Options giving the right to buy September coffee futures at $2 a pound have jumped as much as fivefold to 4.86 cents since reaching an all-time low of 0.83 cent on June 8. During the same period, the September $2.10 calls rose as high as 4 cents from 0.66 cent. The two contracts are the most held among September call options. Coffee futures for September delivery slipped 0.05 cent to $1.6075 on ICE Futures U.S. in New York yesterday.