Futures prices began the day being called to open unchanged with some light fund selling meeting trade buying on the open.
A massive 103,000 decertification this morning helped shape a higher opening, as did one of the major merchants responsible for the decert who were a heavy seller of March at the money puts on the re-opening.
The group sold nearly 2000 of the March 51 and 52 strike puts all told, with March screaming up to 52.75 before running into both trade selling and something of a hole under the market, as the short put hedging by the locals was the only buy flow in the market to this point, other than the local traders who expected a breakout this morning.
The brakes here caused the locals to liquidate their longs immediately, and all prices crashed back down to unchanged and then lower on the day, all the way down to 48.10 and 51.40 respectively.
Pressure next exerted from bear spreading on the Dec / March, pushing this back out beyond 350 premium to the March. Prices remained on the defensive for the rest of the session, before large fund selling took over late in the day. This selling into the close pushed Dec back beneath 48 cents and March almost to it's contract low at 51.25.
In the end the settlement at 51.40 looked very bearish, though there is good export off take currently, both from consigned warehouses in China as well as other A index based origins. Estimated volume today was quite heavy at 26,000 lots.
marketing@alchempro.com
