1. Report Industry Investment Rating - No relevant information provided 2. Core Views - In the short - term, the global sugar import is weak in the third quarter, and high inventories will continue to suppress sugar prices. The Brazilian production will be the key variable determining the global sugar pattern. If the sugar - making ratio or agricultural yield in central - southern Brazil declines, the supply - demand balance still has room for adjustment [3]. - For sugar, the main contract of Zhengzhou sugar oscillated upward overnight and is at the upper edge of the range. The Iran situation may push up the ethanol - to - sugar price, and the sugar - making ratio in the 26/27 season may decline. In the medium - term, the expected decline in Brazilian production may offset part of the supply surplus. Domestically, Zhengzhou sugar is boosted by the external market, and attention should be paid to the impact of the macro - environment on the market [4]. - For cotton, the main contract of Zhengzhou cotton oscillated upward overnight with an upward - shifted price center. The adjustment of the market due to the escalation of the Middle - East situation may be basically over, and the callback range is expected to be relatively limited. In the long - and medium - term, cotton prices may still have room to rise under the expectation of tight supply and demand. Domestically, with increased consumption and low carry - over inventories from last year, the supply this year is expected to be tight. Policy - regulated planting area may support cotton prices in the long - and medium - term [4]. 3. Summary by Relevant Catalogs Futures Market - **Sugar Futures**: For domestic sugar futures contracts (SR2609, SR2605, SR2603), the prices of SR2609 and SR2605 decreased slightly, with a decline of - 0.02% and - 0.13% respectively, while SR2603 remained unchanged. The prices of 11 - sugar futures contracts (11 - sugar2610, 11 - sugar2607, 11 - sugar2605) increased, with an increase of 1.29%, 1.60%, and 1.29% respectively. There were changes in positions and trading volumes, and the price differences between different contracts also changed [2]. - **Cotton Futures**: The main contract of Zhengzhou cotton oscillated upward overnight, and the price center moved up [4]. Spot Market - **Sugar Spot**: The spot price of white sugar in Liuzhou increased from 5450 to 5480. The basis in Liuzhou and Kunming changed compared with the previous value. The import prices of Brazilian and Thai sugar (both quota - within and quota - outside) decreased compared with the previous value [2]. Supply and Demand - **Global Sugar**: The consulting firm StoneX estimated that the global sugar surplus in the 2025/26 season will be significantly reduced from 2.9 million tons to 0.87 million tons, a 70% decrease from the previous estimate. The global sugar supply is expected to increase by 2.6% year - on - year to 194.6 million tons, consumption is expected to increase by 0.5% year - on - year to 193.7 million tons, and the ending inventory is expected to increase by 1.2% year - on - year to 74.6 million tons, with an inventory - to - consumption ratio of 38.5%, slightly lower than the average of the past five years [3]. - **Thailand Sugar**: As of March 11, 2025/26 season, Thailand's cumulative sugarcane crushing volume increased by 0.48% year - on - year to 88.3668 million tons, sugar production increased by 2.98% year - on - year to 9.7927 million tons [3]. - **Brazilian Sugar**: In the first week of March, Brazil exported 444,608.35 tons of sugar, with a daily average export volume of 88,921.67 tons, an 8% decrease compared with the daily average export volume in March of the previous year [3]. Inventory and Positions - **Sugar Inventory and Positions**: The total of sugar warehouse receipts and forecasts remained unchanged at 17,026. The non - commercial long and short positions of ICE 11 - sugar increased, and the long - to - short ratio increased from 0.43 to 0.44 [2].

Report Industry Investment Rating - Not provided in the content Core Viewpoints - The downstream is still resuming work. The expectations of the "Golden March and Silver April" and high production capacity strongly support the lower limit of cotton prices. The large price difference between domestic and foreign markets and the narrow - range oscillation of US cotton limit the increase of Zhengzhou cotton prices. After a rapid sharp rise last week, it has entered an adjustment phase. In the medium - to - long term, the cotton planting area will decline in 2026, the supply - demand situation will improve, and cotton prices still have room to rise. The increase depends on the situation of the new cotton area [4]. Summary by Related Catalogs Market Situation - As of Thursday this week, the 328 cotton spot price index was 16,583 yuan/ton, a week - on - week decrease of 98 yuan/ton; the closing price of the main Zhengzhou cotton contract was 15,250 yuan/ton, a week - on - week decrease of 100 yuan/ton; the basis between them was 1,333 yuan/ton, a week - on - week increase of 2 yuan/ton. The C32S yarn price index was 21,920 yuan/ton, a week - on - week increase of 50 yuan/ton; the closing price of the main Zhengzhou yarn contract was 21,055 yuan/ton, a week - on - week decrease of 200 yuan/ton; the basis between them was 865 yuan/ton, a week - on - week increase of 250 yuan/ton [38]. - As of Thursday this week, the price difference between the domestic 328 cotton price index and the port pick - up price index of imported cotton under the sliding - scale duty was 86 yuan/ton, a week - on - week increase of 19 yuan/ton; the price difference with the port pick - up price of imported cotton under the 1% tariff was 152 yuan/ton, a week - on - week increase of 324 yuan/ton. The price difference between the C32S cotton yarn price index and the port pick - up price was 2,932 yuan/ton, a week - on - week increase of 4,122 yuan/ton [40]. - As of Thursday this week, on the futures market, the price difference between the main Zhengzhou yarn contract and the main Zhengzhou cotton contract was 5,805 yuan/ton, a week - on - week decrease of 100 yuan/ton; the spot theoretical processing profit of 32 - count pure cotton yarn was - 1,990 yuan/ton, and the loss margin narrowed by 156 yuan/ton week - on - week [44]. - As of Thursday this week, the total of Zhengzhou cotton warehouse receipts and valid forecasts was 12,643; the total of Zhengzhou yarn warehouse receipts and valid forecasts was 363 [51]. Supply and Demand - As of yesterday, the price difference between the domestic 328 cotton price index and the port pick - up price of imported cotton under the sliding - scale duty was about 3,000 yuan/ton, and the price difference under the 1% tariff was as high as 4,100 yuan/ton. Under the high price difference, the import profit of cotton yarn has recovered, and the import volume may increase [5]. - As of this Friday, the start - up load index of yarn mills was 49.09, and that of cloth mills was 48.3. Compared with previous years, the resumption of work this year is a bit slower; the raw material inventory of textile enterprises is at the highest level in the same period in recent years, and their purchasing willingness is not strong, and they replenish inventory at low prices [5]. - The International Cotton Advisory Committee (ICAC) released its March monthly report, showing that the global cotton production in the 2026/27 season is expected to decrease by 4% to 24.8 million tons, with the main production cuts coming from Brazil and the United States; the global cotton consumption is expected to remain stable at 25 million tons [6]. - As of the week ending February 26, the weekly signing volume of 2025/26 US upland cotton was 34,100 tons, a 41% decrease from the previous week, a 50% decrease from the four - week average, and a 10% decrease year - on - year. Among them, Vietnam signed 11,500 tons and Pakistan signed 6,300 tons [20].

Report Summary 1. Report Industry Investment Rating No relevant information provided. 2. Core Views - **Sugar**: The main contract of Zhengzhou sugar futures rose slightly driven by positive sentiment in the bulk commodity market. The Iran situation may push up the ethanol - to - sugar price, and sugar mills may adjust the sugar - making ratio, with a possible decline in the sugar - making ratio in the 26/27 crushing season. In the short term, raw sugar will maintain a volatile trend. In the medium term, the expected reduction in Brazil's production may offset part of the oversupply. In the domestic market, Zhengzhou sugar prices are expected to rise due to the boost from the external market, but with high domestic inventories and ample supply, the upside space is limited and it will mainly move in a volatile range [4]. - **Cotton**: The main contract of Zhengzhou cotton futures showed signs of recovery, rising overnight and then falling back. The escalation of the Middle - East situation has brought adjustment and risk - aversion pressure to the market after digesting previous positive factors, but the回调 amplitude is expected to be relatively limited. In the long - term, with the expectation of tight supply and demand, cotton prices may still have room to rise. In the domestic market, with increased consumption and low carry - over inventory from last year, the supply this year is expected to be tight. Policy - regulated planting area may support cotton prices in the long - term. It is advisable to consider buying on dips recently [4]. 3. Summary by Related Catalogs Futures Market - **Sugar Futures**: For domestic sugar futures on March 6, 2026, compared with the previous two days, the prices of contracts SR2609, SR2605, and SR2603 all increased, with increases of 25, 22, and 40 respectively, and corresponding increases of 0.47%, 0.41%, and 0.76%. The prices of 11 - number sugar contracts 2610, 2607, and 2605 also rose, with increases of 0.04, 0.02, and 0.04 respectively, and increases of 0.28%, 0.15%, and 0.28%. The trading volume and open interest of each contract also changed to varying degrees [2]. - **Cotton Futures**: Only the trend description of the main contract of Zhengzhou cotton futures is provided in the report, with overnight rise and subsequent fall - back, and analysis of future trends [4]. Spot Market - **Sugar Spot**: The spot prices of white sugar in Liuzhou and Kunming were 5390 and 5225 respectively on March 6, 2026. The basis of Liuzhou and Kunming against SR2509 was 75 and - 90 respectively. The import prices of Brazilian and Thai sugar under quota and out - of - quota also changed compared with the previous day [2]. Inventory and Position - **Sugar Inventory and Position**: As of March 6, 2026, the number of sugar warehouse receipts was 14,585, the effective forecast was 2,585, and the total of warehouse receipts and forecasts was 17,170. For ICE 11 - number sugar, non - commercial long positions were 183,446, non - commercial short positions were 429,569, and the long - to - short ratio was 0.43 [2]. Industry Information - **India Sugar Industry**: In the 2025/26 crushing season as of March 3, 2026, 113 sugar mills in India's Maharashtra state had stopped crushing, with 97 remaining in operation, 102 fewer than the same period last year. The cumulative crushed cane was 100.51 million tons, an increase of 18.179 million tons over the same period last year; sugar production was 9.5031 million tons, an increase of about 1.7805 million tons; the average sugar - production rate was 9.45%, an increase of 0.07% over the same period last year. India may face a tight sugar supply situation later this year due to lower - than - expected production and tight inventory. However, reduced exports to the Gulf market may provide some buffer for domestic supply [3]. - **Guangxi Sugar Industry**: As of March 3, 2026, 3 sugar mills in Guangxi had stopped crushing in the 25/26 crushing season, 44 fewer than the same period last year, with a crushing capacity of 14,000 tons per day, a decrease of 390,500 tons per day. It is expected that more than 3 sugar mills will stop crushing this week [3].

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The report maintains the view that the cotton price will move upward in the medium to long term and fluctuate strongly. It is advisable to go long on dips. The core drivers are the tight balance of China's cotton supply - demand structure in the 25/26 season and the possible decline in cotton - planting area in Xinjiang in 2026 [4]. 3. Summary by Relevant Catalogs Price Performance - Today, Zhengzhou cotton opened high and moved higher. The main contract added more than 90,000 lots, breaking through the 15,000 yuan/ton mark and the previous high in early January, closing at 15,285 yuan/ton [2]. Market Review - **Macro - level**: The tariff reduction boosted the commodity market atmosphere. The US Supreme Court ruled that the large - scale tariffs imposed by the Trump administration under the "International Emergency Economic Powers Act" (IEEPA) were invalid. Trump announced a new 10% global temporary tariff starting from February 24, 2026 (valid for 150 days), and then raised it to 15%. The 20% tariff imposed on China by the US since last year has dropped to 15% [2]. - **Industry - level**: The first forecast report of the USDA Agricultural Outlook Forum for the 26/27 season is positive. Globally, the total cotton production is expected to decrease by 3.2% year - on - year, consumption to increase by 1.2%, ending stocks to decrease by 5.2%, and the stock - to - consumption ratio to decline by 6.3%. In the US, the cotton planting area is expected to increase by 1.3% year - on - year, the harvested area to decrease by 2.2%, and the total production to decrease by 2.3%. Consumption remains flat, exports increase by 1.7%, ending stocks decrease by 4.5%, and the stock - to - consumption ratio declines by 6.2%. A decline in the US cotton stock - to - consumption ratio will drive up the medium - to - long - term price center [3]. Outlook for the Future - In the medium to long term, the cotton price is expected to rise. However, in the short term, whether the upward trend continues or slows depends on other factors. The current low price of the external market and the widening internal - external price difference limit the upside of the domestic market. Attention should be paid to the USDA's cotton planting intention report at the end of March, weather conditions, the "Golden March and Silver April" demand season after the Spring Festival, and the Xinjiang target price subsidy policy [4].

Report Industry Investment Rating - No information provided Core Viewpoint - The cotton price is expected to maintain a volatile and upward - trending pattern in the future, driven by factors such as festival stocking and a reduction in cotton - planting area. Although the domestic cotton commercial inventory is at a high level, the short - term inventory pressure is controllable due to the combination of downstream rigid demand replenishment and the expectation of reduced planting in the future [2] Summary by Relevant Catalogs Futures Market - Zhengzhou cotton main contract closing price is 14,650 yuan/ton, down 45 yuan; cotton yarn main contract closing price is 20,515 yuan/ton, up 10 yuan - Cotton futures top 20 net positions are - 155,478 lots, an increase of 8,641 lots; cotton yarn futures top 20 net positions are - 1,505 lots, an increase of 331 lots - Cotton main contract open interest is 795,878 lots, down 7,457 lots; cotton yarn main contract open interest is 13,284 lots, down 987 lots - Cotton warehouse receipt quantity is 10,144 sheets, an increase of 172 sheets; cotton yarn warehouse receipt quantity is 0 sheets, unchanged [2] Spot Market - China Cotton Price Index (CCIndex:3128B) is 15,995 yuan/ton, up 125 yuan; China Yarn Price Index (pure cotton carded yarn 32s) is 21,365 yuan/ton, unchanged - China Imported Cotton Price Index (FCIndexM:1% tariff) is 12,445 yuan/ton, down 69 yuan; China Imported Cotton Price Index (FCIndexM: sliding - scale tariff) is 13,633 yuan/ton, down 51 yuan - The arrival price of imported cotton yarn price index (pure cotton carded yarn 32s) is 21,068 yuan/ton, up 2 yuan; the arrival price of imported cotton yarn price index (pure cotton combed yarn 32s) is 22,557 yuan/ton, up 2 yuan [2] Upstream Situation - The national cotton sowing area is 2,838.3 thousand hectares, an increase of 48.3 thousand hectares; the national cotton output is 6.16 million tons, an increase of 0.54 million tons - The cotton - yarn price difference is 5,370 yuan/ton, down 125 yuan; the national industrial inventory of cotton is 848,000 tons, down 2,000 tons [2] Industry Situation - The monthly import volume of cotton is 180,000 tons, an increase of 60,000 tons; the monthly import volume of cotton yarn is 170,000 tons, an increase of 20,000 tons - The daily profit of imported cotton is 2,237 yuan/ton, an increase of 82 yuan; the national commercial inventory of cotton is 5.7847 million tons, an increase of 1.1011 million tons [2] Downstream Situation - The inventory days of yarn are 25.12 days, down 1.21 days; the inventory days of grey cloth are 33.76 days, up 1.42 days - The monthly output of cloth is 3.01 billion meters, an increase of 0.2 billion meters; the monthly output of yarn is 2.132 million tons, an increase of 93,000 tons - The monthly export value of clothing and clothing accessories is 134,124,120,000 US dollars, an increase of 18,187,260,000 US dollars; the monthly export value of textile yarns, fabrics and products is 125,796,030,000 US dollars, an increase of 3,038,700,000 US dollars [2] Option Market - The implied volatility of at - the - money call options for cotton is 12.13%, down 0.75%; the implied volatility of at - the - money put options for cotton is 12.16%, down 0.7% - The 20 - day historical volatility of cotton is 14.8%, up 0.08%; the 60 - day historical volatility of cotton is 9.45%, up 0.01% [2] Industry News - According to the USDA report, in the week ending January 15, the net export sales of US upland cotton in the 2025/26 season increased by 412,500 bales, reaching the annual high, a 21% increase from the previous week and a 119% increase from the average of the previous four weeks. The export shipment volume of US upland cotton in the 2025/26 season was 187,800 bales, a 20% increase from the previous week and a 26% increase from the average of the previous four weeks - According to a Brazilian authoritative institution, in December 2025, Brazil exported 452,500 tons of cotton, a 28.2% year - on - year increase. In the first five months of the 2025/26 season, the cumulative export volume was 1.405 million tons, a 15.7% year - on - year increase, reaching the highest export volume from August to December in history [2]

Sugar Industry - The average sugarcane yield in Brazil's central-south region for December 2025 is projected to be 73.4 tons per hectare, an increase of 26.6% compared to 58 tons per hectare in the same period of 2024 [2] - The cumulative yield for the 2025/26 crushing season (April to December) is expected to be 74.7 tons per hectare, down 4.6% from 78.3 tons per hectare in the previous season [2] - Spot prices for sugar in Guangxi range from 5270 to 5360 yuan per ton, down by 10 to 20 yuan per ton; in Yunnan, prices are between 5120 and 5160 yuan per ton, down by 20 to 30 yuan per ton [2][6] - The raw sugar market continues to show a fluctuating pattern, with domestic spot prices declining and transaction volumes decreasing, leading to a sustained accumulation of inventory [2][6] Cotton Industry - ICE cotton prices fell by 0.06% to 64.3 cents per pound, while Zheng cotton's main contract rose by 0.17% to 14535 yuan per ton, with a decrease in open interest by 908 contracts to 787200 contracts [3][7] - The cotton 3128B spot price index is at 15445 yuan per ton, an increase of 55 yuan per ton from the previous day [3][7] - The market is currently focused on supply dynamics, pre-holiday downstream stocking demand, and operational conditions, with expectations of increased cotton production and imports [3][7] - Textile companies have been replenishing raw material inventories, but the motivation for significant restocking before the holiday is weak, with available days of textile raw material inventory at approximately 32 days [3][7] - As the Spring Festival approaches, operational rates are expected to gradually decline, and the current fundamentals may not support a sustained rise in cotton prices, although future policy developments remain promising [3][7]

Sugar Market - The current spot price range for sugar from Guangxi Sugar Group is 5320 to 5380 CNY/ton, with a slight decrease of 10 CNY/ton for some quotes [2] - Yunnan Sugar Group's price is between 5190 to 5230 CNY/ton, also down by 10 CNY/ton for certain quotes [2] - Raw sugar prices are under pressure due to declining energy prices and a significant increase in India's production year-on-year, necessitating attention to production progress in Thailand and India [2] - The domestic market is experiencing moderate transactions, with expectations for future import regulation, providing some support for prices; however, there is significant pressure above the 5300 CNY/ton level, leading to a forecast of weak fluctuations as holidays approach [2] Cotton Market - On Thursday, ICE cotton prices fell by 0.57%, closing at 64.62 cents/pound, while Zhengzhou cotton futures dropped by 0.61% to 14675 CNY/ton, with a decrease in open interest by 6537 contracts to 835800 contracts [8] - The cotton price index for 3128B is 15550 CNY/ton, down by 65 CNY/ton from the previous day [8] - Internationally, geopolitical tensions are affecting the market, and the likelihood of no interest rate cuts in January in the U.S. is contributing to a strong dollar index above 99 [8] - The USDA's January report has reduced the expected U.S. cotton production for 2025/26, providing some support for cotton prices [8] - In the domestic market, Zhengzhou cotton has shown reduced volatility, primarily fluctuating within a narrow range, while the USDA report has increased the expected production and consumption of cotton in China for 2025/26, aligning with market expectations [8] - Recent data indicates a year-on-year decline in clothing exports, and there are significant differences in raw material inventory levels among textile enterprises, highlighting the need to monitor replenishment actions before the holiday [8] - Overall, short-term fluctuations in Zhengzhou cotton prices may show some divergence, but there are positive expectations from policy developments in the medium to long term, suggesting potential upward movement in cotton prices [8]

Sugar Market - As of January 7, 2025/26 crushing season, Thailand's cumulative sugarcane crushed reached 16.9782 million tons, a decrease of 5.765 million tons or 25.35% compared to the same period last year [3][6] - Sugar content in sugarcane was 11.54%, down 0.08% from 11.62% last year; sugar extraction rate was 9.017%, a decrease of 0.209% from 9.226% last year [3][6] - Sugar production amounted to 1.5309 million tons, down 567,300 tons or 27.03% from 2.0982 million tons last year [3][6] - Current spot prices for sugar in Guangxi range from 5,320 to 5,380 CNY/ton, with a slight increase of 10 CNY/ton for some; Yunnan's prices remain stable at 5,140 to 5,230 CNY/ton [3][6] - Domestic sugar prices have been supported by macroeconomic sentiment and a rebound in commodity prices, but there is significant pressure from hedging positions, leading to expectations of continued price fluctuations [3][6] Cotton Market - On Thursday, ICE cotton fell by 0.69%, closing at 64.4 cents per pound; Zheng cotton's main contract decreased by 1.5%, closing at 14,740 CNY/ton [7] - The main contract's open interest decreased by 62,575 contracts to 852,900 contracts; the cotton 3128B spot price index was 15,610 CNY/ton, down 70 CNY/ton from the previous day [7] - The international market is experiencing significant macro disturbances, with limited marginal changes in fundamentals, leading to a predominantly volatile market [7] - Domestic market sentiment has cooled slightly, with recent strong expectations driving prices; however, increased procurement costs at high price levels may impact future operations [7] - The market is expected to experience wide fluctuations in the short term, while medium to long-term policies may provide positive outlooks for cotton prices [7]

Group 1 - The domestic cotton market experienced fluctuations in November, characterized by a decline followed by a rebound, with domestic prices showing strength while international prices remained weak [1][2] - The China Cotton Price Index decreased from 14,859 CNY/ton to a low of 14,779 CNY/ton in early November, before rebounding to a month-end high of 14,896 CNY/ton, resulting in a month average of 14,831 CNY/ton, which is an increase of 67 CNY compared to the previous month but a decrease of 497 CNY year-on-year [2] - The futures market showed greater volatility than the spot market, with the main contract for Zheng cotton dropping from 13,640 CNY/ton to 13,380 CNY/ton before recovering to 13,725 CNY/ton, resulting in a month average settlement price of 14,543 CNY/ton, which is an increase of 94 CNY month-on-month and 536 CNY year-on-year [4] Group 2 - The demand for long-staple cotton remained stable, with prices holding steady; the price for 137-grade long-staple cotton was 25,000 CNY/ton at the end of the month, unchanged from the previous month, while the month average transaction price increased by 1,800 CNY/ton year-on-year [6] - The international cotton price faced downward pressure due to concerns over economic slowdown and increased global production forecasts, with the average price of imported cotton at 74.11 cents/pound, a decrease of 0.4% month-on-month [7] - Domestic cotton yarn prices slightly rebounded in November, with the average price for domestic 32-count cotton yarn at 20,564 CNY/ton, an increase of 95 CNY month-on-month, while polyester and viscose staple fibers continued to decline due to weak downstream demand [10][11]

Sugar Industry - Green Pool forecasts that Thailand's sugar production for the 2025/26 season will increase by 6% year-on-year to 10.7 million tons [2] - For the 2026/27 season, sugar production is expected to decline by 7.5% to 9.9 million tons [2] - Current spot prices from Guangxi Sugar Group range from 5,390 to 5,470 CNY/ton, with a slight decrease of 20 CNY/ton; Yunnan Sugar Group prices are between 5,320 and 5,360 CNY/ton, while processing plants maintain prices between 5,700 and 5,900 CNY/ton [2][7] - The raw sugar futures market continues to experience fluctuations without new driving factors; domestic spot transactions are average, and with more sugar factories starting production, short-term supply is sufficient, leading to a pessimistic market sentiment [2][7] - The May contract is in a weak consolidation phase, and the market is expected to remain under pressure in the medium term [2][7] Cotton Industry - On Wednesday, ICE cotton rose by 0.41% to close at 64.12 cents per pound, while CF601 increased by 0.15% to 13,780 CNY/ton; the main contract's open interest decreased by 5,219 contracts to 473,300 contracts [8] - The cotton price index for 3128B is 14,590 CNY/ton, up by 20 CNY/ton from the previous day [8] - The Federal Reserve's December meeting resulted in a 25 basis point rate cut, but there are divergences in the future rate cut path among committee members, leading to a slight weakening of the dollar index and a small upward shift in cotton futures prices [8] - Domestic cotton prices are currently maintaining a fluctuating trend; the upcoming Central Economic Work Conference is being closely monitored [8] - Despite high monthly consumption levels in November, the second half of the month saw a decrease in cotton consumption compared to the first half, indicating a weakening of upward driving factors for cotton prices [8] - The outlook suggests a mixed market with various influencing factors, with a short-term expectation of a fluctuating pattern; however, in the medium to long term, it is believed that the upside potential for cotton prices is greater than the downside [8]