Course 15 of 20 · Coffee Desk Academy

Options, Floors & Collars

Stage D, Fixation and structured price protection. Level 8 of 10.

Using exchange and over-the-counter options on coffee to build floors, caps and collars around a physical or fixation exposure.

119 chapters · 12 modules · every chapter one 8 to 10 minute explainer · builds on: Course 11, Course 12, Course 14

Enrol or enquire See the 119 chapters
How a chapter is delivered

One chapter is one idea taken to the point of use

Each chapter covers one idea to the point where you can use it, and comes two ways: a narrated explainer, and a deep dive audio discussion of around thirty minutes that works the same material at depth.

Self-paced throughout, and the same chapters can be taught as a cohort. Chapters run in order: each one assumes only what the chapters before it taught, and capability belonging to a later course is named and deferred rather than half-covered.

Curriculum

12 modules · 119 chapters

Open any module for its full chapter list, in teaching order.

M0 Protection Bought Around a Hedge Already Placed Ch 1-10
  1. Why a Fully Hedged Coffee Book Still Buys Protection
  2. A Right Held by One Party and Granted by the Other
  3. A Floor Is Bought by Whoever Carries the Downside
  4. A Cap Protects Whoever Still Has Coffee to Buy
  5. Premium Is a Price Paid, Not a Fee Recovered
  6. The Two Places a Coffee Desk Can Buy an Option
  7. What the Futures Hedge Already Does and What It Cannot
  8. The Exchange Price Is the Only Thing These Options Reference
  9. Whose Exposure Is Being Protected, Asked Before Anything Else
  10. What Floors and Collars Leave to the Rest of the Desk
M1 The Terms of a Coffee Option Contract Ch 11-20
  1. The Strike Quoted in Cents per Pound
  2. One Option, One Futures Lot
  3. The Gap Between Option Expiry and the Futures Month
  4. Exercise Delivers a Futures Position, Not Coffee
  5. Exercise Style on the Two Coffee Contracts
  6. Automatic Exercise and the Instruction That Overrides It
  7. Reading a Bilateral Coffee Option Confirmation
  8. When the Premium Is Paid and What Treasury Notices
  9. Cleared Rules Against a Negotiated Master Agreement
  10. A Confirmation That Named the Wrong Position Month
M2 Where the Premium Comes From Ch 21-30
  1. Immediate Advantage Against the Prevailing Futures Level
  2. What a Strike Costs When It Confers No Advantage Today
  3. The Erosion Accelerates Into the Last Weeks
  4. The Reference Is the Position Month, Not Today's Spot
  5. Carry and Curve Shape Change What a Strike Means
  6. Movement Priced, Not Direction Predicted
  7. Why Deep Strikes Carry a Different Assumption
  8. Frost, Drought and the Calendar the Market Charges For
  9. A Parity Check Between a Put, a Call and the Futures
  10. Why Two Dealers Quote the Same Coffee Option Differently
M3 Reading an Option Position in Lots and in Days Ch 31-39
  1. Three Questions a Merchant Puts to an Option Holding
  2. The Lot Equivalent of an Option Holding
  3. Why the Lot Equivalent Moves When a Futures Hedge Does Not
  4. The Rate at Which the Lot Equivalent Itself Changes
  5. What Another Week of Cover Costs a Financed Position
  6. Losing Money While the Terminal Price Stands Still
  7. What Belongs on a Coffee Desk's Daily Sheet
  8. A Position Report With Options and Futures Side by Side
  9. Why an Origin Book Leaves Its Cover Alone
M4 Floors Held by the Merchant Over Unsold Coffee Ch 40-49
  1. The Merchant Is Long Until the Coffee Is Sold and Priced
  2. A Floor Held by the Merchant, Granted by the Dealer
  3. Choosing the Floor Level Against the Carry Already Funded
  4. A Floor Shown Across Two Terminal Prices, Deliberately
  5. A Floor Over Coffee Still in an Origin Warehouse
  6. Why the Floor Did Not Save the Position
  7. Arabica Cover and Robusta Cover Are Not Interchangeable
  8. Flooring Half the Crop and Saying So Out Loud
  9. The Floor a Merchant Already Granted Without Charging for It
  10. A Full Crop Position Floored Lot by Lot
M5 Caps Held by the Party That Still Has to Buy Ch 50-58
  1. Short Until the Coffee Is Bought
  2. A Cap Held by the Merchant, Granted by the Dealer
  3. Choosing a Ceiling Against the Margin in the Forward Sale
  4. Cover for a Tender That May Not Be Won
  5. A Ceiling Over a Blend Bought on Two Contracts
  6. Protection for a Growing Short That Nobody Reported
  7. Why a Ceiling Does Nothing for Coffee Already Owned
  8. The Roaster's Ceiling and Where This Material Stops
  9. A Forward Sale Book Covered Month by Month
M6 Protection Granted Rather Than Held Ch 59-67
  1. The Granting Seat and Why It Attracts Different Authority
  2. Covered and Uncovered Grants Are Different Businesses
  3. Granting a Ceiling Over Coffee the House Already Holds
  4. A Floor Granted to a Cooperative at Origin
  5. Pricing the Grant Into the Differential Rather Than a Fee
  6. The Minimum Price Already Written Into a Certification Scheme
  7. Producer Protection Organised at Origin
  8. What a Granting House Must Be Able to Reprice Itself
  9. The Rights a Merchant Gives Away in Ordinary Terms
M7 Collars and Funded Structures Ch 68-77
  1. Two Legs, One Commercial Shape
  2. The Collar: A Floor Held, Funded by a Ceiling Granted
  3. Setting the Two Levels of a Coffee Collar
  4. The Collar With No Premium and a Bill in a Strong Year
  5. A Third Leg That Cheapens the Floor and Opens a Hole
  6. Following a Crop Scare Through the Hole
  7. Keeping Part of a Frost Rally
  8. Cover Across a Band Rather Than All the Way Down
  9. A Level That Switches the Floor Off
  10. Repricing a Dealer's Proposal Before Signing It
M8 Structured Price Protection Inside a Fixation Ch 78-88
  1. The Unfixed Balance as an Exposure, Not a Process
  2. A Seller Who Fixes Later Carries the Downside
  3. A Buyer Who Fixes Later Carries the Upside Risk
  4. Expiry Aligned to the Fixation Deadline
  5. Cover That Shrinks as the Balance Is Fixed
  6. The Minimum Price Contract as a Floor Inside the Physical Deal
  7. What the Merchant Does After Granting a Minimum Price
  8. The Maximum Price Contract Held by a Roaster
  9. A Floor and a Ceiling Both Written Into One Fixation
  10. Why the Protection Does Not Travel With the Futures Position
  11. A Season of Fixations Protected From Both Seats
M9 Averaging, Strips and the Shipment Calendar Ch 89-97
  1. One Expiry Date Fits a Shipment Programme Badly
  2. Settlement Against the Mean of the Quotation Days
  3. Why an Averaged Settlement Costs Less Than a Single Date
  4. Matching the Window to the Quotation Days Named in the Sale
  5. A Strip of Monthly Protection Across a Shipment Schedule
  6. Protection That Unwinds Itself on a Known Schedule
  7. A Short Window Behaves Almost Like a Single Date
  8. Cover Written Over Several Origins at Once
  9. Rolling Short-Dated Cover Against Buying It Once
M10 Valuing These Structures by Averaging Payoffs Ch 98-107
  1. What the Floor Pays Under Each Terminal Price, Then the Mean
  2. Flooring an Averaged Cents per Pound Figure Understates It
  3. Building Terminal Price Paths a Credit Committee Will Accept
  4. Valuing a Ceiling the House Has Granted
  5. The Collar's Two Sides Averaged Apart, Then Netted
  6. Valuing the Floor Embedded in a Minimum Price Contract
  7. Valuing a Participation Share Across the Upper Paths
  8. How Much the Weights Themselves Decide
  9. Two Desks Averaging the Same Structure to Different Answers
  10. What the Averaged Payment Figure Cannot Settle
M11 The Arguments, the Controls and a Worked Desk Case Ch 108-119
  1. The Argument That Premium Spent on Floors Is Recovered
  2. The Argument for Funding Cover by Granting Upside
  3. Telling a Hedge From a Punt on the Position Sheet
  4. Limits That Genuinely Bite on a Coffee Option Book
  5. The Mandate That Names Each Permitted Structure
  6. A Mark Nobody on the Desk Produced
  7. Explaining the Option Book to a Managing Director
  8. A Direction Audit Across Every Structure in the Book
  9. What a Floor Cannot Do for a Coffee Merchant
  10. A Worked Desk Case, Part One: Stating the Exposures
  11. A Worked Desk Case, Part Two: Choosing and Sizing the Structures
  12. A Worked Desk Case, Part Three: Valuing and Defending the Decision

The brochure gives each of these 119 chapters a paragraph on what it covers and what you can do once you have worked through it.

This is course 15 of twenty

It stands alone, and it is also the entry point to the Coffee Desk Academy pathway.

Enrol or enquire See the whole pathway