Coffee came storming back on Friday. The last two days, Coffee and Crude Oil have had significant bounces and also increases in implied volatility. Coffee Implied Volatility remains below the 30 Day Historical Volatility. The S&P rallied almost two percent and as is typical with a rally in stocks, the Implied Volatility fell. As we move towards the Labor Day Weekend, we could see some of this volatile activity begin to subside. Please consider that when initiating Long Volatility plays. If you have a directional trading bias and want to establish an options position, I would recommend a vega neutral spread rather than an outright purchase. If you are directionally correct, you won’t have to worry too much about the affects of the Implied Volatility. The Chart below highlights Friday’s essential information. Each day I review the information provided below and analyze the options settlements to help determine the appropriate strategies for establishing positions. A risk/reward analysis should always be considered before initiating positions. I can be reached at 212-383-9453 or at fred.oltarsh@libanman.com for a no obligation discussion about position ideas. If you’re trading the S&P, Coffee or Crude Oil, I have options trading suggestions which might mesh nicely with your trading opinions.  

The chart represents some useful information pertaining to tonight’s settlement prices. Most of the columns are self explanatory but hereis the key to the lesser known columns: RSI is the Relative Strength Index and measures a market’s overbought or oversold status. Anumber greater than 70-80 would be considered potentially overbought while a number below 30-20 might be considered oversold. The  10 and 30 HV are the 10 and 30 day Historical Volatility for the Commodity. IV refers to the Implied Volatility of the At-The-Money Option. The ATR and $-ATR refers to the 20-day Average Trading Range of the Futures Contract and the Dollar Range for the Contract . Much of this information is a simple way of analyzing Implied and Historical Volatility and is a concise review of the markets.For help interpreting the numbers or understanding how this type of analysis will help your trading call us at 212-383-9453.