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How to Play the Upside In Coffee


We rarely write about coffee, and we almost never offer up strategy ideas in coffee. Not only are coffee options on the thin side, the risk is generally higher in this market than other commodities due to the explosive nature in pricing, relatively high margins, and the fact that most retail traders don’t have real-time quotes on this product due to (in my opinion) unreasonably high data fees charged by the ICE exchange to access live price data. Nevertheless, despite lingering high prices at your favorite coffee shop, we are looking at coffee futures trading at their lowest level in a decade. Further, the Commitments of Traders Report issued by the CFTC (Commodity Futures Trading Commission) suggests the number of short traders in this market is at a historical high.

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