Wanted to share an idea I'm playing around with and would welcome any and all feedback.

Question: Does it make sense to use the Robusta market as a cheaper alternative to traditional OTM calls in KC in front of the Brazilian winter ?

I know this is a bit unorthodox but my thinking would be along the lines of:
Robusta incorporation is at a record, so any supply problem in Arabica will translate into further demand for Robusta both in Brasil and globally

There is an appx 10% spread in IV in OTM calls (Robusta options are of course cheaper)

Robusta options are much cheaper from a premium perspective: a U3 2600C for example is appx 3-4 cents, while a KC 195C is appx 9.5 Cents

The 2600c by the way is 118c/lb. Not exactly earth shatteringly expensive place to get long a structural deficit mkt.

The forward Robusta SnD is in a deficit so there is some fundamental support to the market already, while the KC market is in surplus

Appreciate debate and feedback!!