Selling Coffee Option and Taking Profits

Today, Sept. Coffee futures touched as low as 174.8 (at the time of this post), and they had reached as low as 173.25 last Wed. 5/28.  We have been short Sept. Coffee futures from 180.0 with our Sept. Put option (1800 strike price) we bought for $4435 back on 5/9 (see previous post:   Short Coffee Today After Drop Below Support).  As shown in the Daily Coffee chart below, prices are very close to the 50% Retracement level of 170.4, now for the second time since last Wed.   Yes, prices could continue to drop and even surpass the 50% Retracement level.   However, today we sold our Put option for $6,341.

That gives us $1906 profit and 43% ROI in LESS THAN 1 MONTH!

Daily Coffee futures chart - Sept 2014

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