Wow, Lee, that's all I have to say. I don't know how many lbs per barrel and I don't really worry since I don't plan to have my cotton delivered to my front yard. I hardly trade soft mkt.
I thought I'd pick the top and bought a few puts when the front month contract hit 150. It's a losing game even if price corrects or the trend reverses.
Because when the price down, so is the ATM premium( I noticed). In fact, my plan is: Once(or if the trend reverses), I will get rid of my puts ASAP.
Something very fishy about this mkt. I see they keep both calls and puts premiums high(artificially) for far far far out of the money options to lure innocent option buyers.
I won't be surprised if some really angry traders demand audit on their option selling (pricing) strategy(I wont' call it manipulation since I dont' know for sure). All these very expensive far out of the money options will become worthless.
About FND etc. I was thinking the same thing. If the front mo price doesn't drop sharply (140 level, the most damaging to option holders as of a wk ago), we know there are crazies who really want the physical cotton for SOME reason.