Core Insights - T Company engages in sugar trading with a monthly trading volume of approximately 5,000 tons and employs a rigorous strategy for options hedging [1] - The company utilizes a dual selling strategy for sugar options, capitalizing on low volatility in the VIX index, which ranges from a high of 25.11 to a low of 7.98, with an average volatility of 17.13 [2][3] - The implementation of the dual selling strategy has increased trading opportunities from 6 to 12 times a year due to the introduction of series options [4][13] Trading Strategy - The dual selling strategy aims to profit from declining volatility and time decay, requiring the selling of a sufficiently large range to mitigate directional risk [4] - T Company has set a price fluctuation range of 1,000 CNY/ton to manage extreme market conditions [5] - The company selected strike prices of 5,500 CNY and 6,500 CNY based on a neutral Delta value to balance the options portfolio [8] Market Analysis - The VIX index indicates a stable market environment for sugar futures, which is characterized by narrow price fluctuations, making it an ideal target for options sellers [13] - The company anticipates that the sugar price will remain within the range of 5,500 to 6,500 CNY/ton over the next 14 trading days, allowing for strategic positioning [10] Financial Performance - By executing the dual selling strategy, T Company expects to achieve an annualized return of 14.88%, significantly exceeding its funding cost of 2.5% [11] - The strategy's effectiveness is enhanced by the faster time decay of series options compared to conventional options, allowing for quicker realization of profits [14]