Inflation Could Add Big Boost for Commodity Option Sellers in 2018




Inflation Could Add Big Boost for Commodity Option Sellers in 2018

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(Video Transcript)

Good afternoon. This is James Cordier of with a market update for January 13th. Well, each year at this time, early January, we’re often trying to analyze the landscape of the upcoming year and try to find out what nuances, possibly, will be shaping trading this coming year. We appear to be about to get a helping hand from something that’s been lacking from the commodities markets for several years. That is one word that has been talked about often on the business channels as well as the Wall Street Journal recently, and that’s inflation.

Many money managers around the world want to participate in commodities but they really need a little bit of a push from time to time. 2018 looks like they’re going to get that. There are certainly some increases in certain commodity prices already this year. That has a lot of investors looking at the possibility for inflation and getting a hedge around themselves. Often, money managers want to buy precious metals, they want to buy energies and some of the foods, and that’s what has been lacking in commodities over the last 3-4 years.

We think that in 2018 we are going to have those additional buyers and participants in the market. Often, that increases the value of options, both puts and calls, something we think will be very well taken advantage of by us this year. We do want to add 2 or 3 commodities to our book this year. We’re hoping for grains to be a larger content of our portfolios and, of course, in the soft markets like coffee and sugar, as well. We do see that happening. We’ll have to wait and see.

We always want to be diversified as much as possible, but not just diversifying in order to only do that. We want to wait for opportunities. We think we’re going to get those additional opportunities in 2018. We’ll have to wait and see. We are very optimistic about the landscape going forward this year. We’re going to be trying to take advantage of those in the coming weeks and months, and we’ll see how we do.

Anyone wanting more information from can visit our website. If you’re not already a client and wish to become one, you can contact our home office in Tampa, Florida and ask Rosie about becoming one. As always, it’s great chatting with you and looking forward to doing so again in 2 weeks. Thank you.

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