Another day, another round of contract lows in December, though it must be again noted that there was little liquidity again today. Reports this morning were that again little overnight export business had taken place.
Indeed with the Chinese on their October week holiday there has been little steady business over the past week, with the exception of Tuesday night.
As it stood prices again opened on their highs today at 49.69, with prices quickly eroding in the first hour down to 49.0 level. Locals were visibly gunning for sell stops, knowing that Dec under 49 cents would undoubtedly uncover a plethora of stops.
Unfortunately the blood didn't really hit the floor as commercial buying and mill fixations around the 49 cents mark were enough to hold things together.
After the first hour the market settled into a very mundane sideways range between 49.15 and 49.30, before market on close spec selling pushed prices back to the lows, finally settling back at 49.13 for active month losses of 60-73 points. Estimated volume was middle of the road at 11,500 lots.
Options activity was noticeably bearish today, as it looks as though some of the commercials have given up on the market and reversed their views decidedly.
One of the largest commercials was a buyer of 500 Dec 49 put /March 56 call bear fences as well as a buyer of 800 Dec 07 55 put / 65 call bear fences for around 160 cost to the puts. Another merchant was a massive buyer of 1,000 Dec 50 puts for 200.
marketing@alchempro.com
