Coffee Options Explained

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Coffee Options Explained

Coffee options are option contracts in which the underlying asset is a coffee futures contract.

The holder of a coffee option possesses the right (but not the obligation) to assume a long position (in the case of a call option) or a short position (in the case of a put option) in the underlying coffee futures at the strike price.

This right will cease to exist when the option expire after market close on expiration date.

Coffee Option Exchanges

Coffee option contracts are available for trading at NYSE Euronext (Euronext).

Euronext Coffee option prices are quoted in dollars per metric ton and their underlying futures are traded in lots of 10 tonnes of coffee.

Exchange & Product Name Underlying Contract Size Exercise Style Option Price Quotes
Euronext Coffee Options 10 ton
(Full Contract Specs)
American Calls | Puts

Call and Put Options

Options are divided into two classes – calls and puts. Coffee call options are purchased by traders who are bullish about coffee prices. Traders who believe that coffee prices will fall can buy coffee put options instead.

Buying calls or puts is not the only way to trade options. Option selling is a popular strategy used by many professional option traders. More complex option trading strategies, also known as spreads, can also be constructed by simultaneously buying and selling options.

Coffee Options vs. Coffee Futures

Additional Leverage

Limit Potential Losses

As coffee options only grant the right but not the obligation to assume the underlying coffee futures position, potential losses are limited to only the premium paid to purchase the option.

Flexibility

Using options alone, or in combination with futures, a wide range of strategies can be implemented to cater to specific risk profile, investment time horizon, cost consideration and outlook on underlying volatility.

Time Decay

Options have a limited lifespan and are subjected to the effects of time decay. The value of a coffee option, specifically the time value, gets eroded away as time passes. However, since trading is a zero sum game, time decay can be turned into an ally if one choose to be a seller of options instead of buying them.

Learn More About Coffee Futures & Options Trading

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Different types of coffee explained

Posted by Canstar Blue 27/02/2020

Regardless of why you’re drinking coffee, what matters most is how it tastes, smells, and whether or not it makes you feel alert and happy in the morning. That being said, everyone has their favourite order – perhaps a latte, a piccolo, or maybe a long black.

We checked online to see how many types of coffee beverages there are… it turns out, there’s quite a lot. Over thirty different types were listed on one website, and more than forty on another. To save us all some time, we will confine this list to the most commonplace coffees available, and what many Canstar Blue staff deem the most delicious.

Did we forget your favourite type of coffee? Let us know at [email protected] and we’ll add it to the article!

Caffè Americano

You can make this type of coffee quite simply by adding hot water to a shot of espresso coffee. It has been said that American soldiers during WWII made this type of coffee to make their beverages last longer. It was then (apparently) adopted by American baristas after the war.

Café Latte (or Café au lait)

A fairly popular option for coffee drinkers, a latte consists steamed (or scalded) milk and a single shot of coffee. It is usually quite frothy, and you’ll occasionally encounter cafes that don’t understand the difference between this and a flat white.

Cappuccino

Possibly the most popular type of coffee in the world, a cappuccino consists of three layers (kind of like a cake). The first is a shot of espresso, then a shot of steamed milk, and finally the barista adds a layer of frothed, foamy milk. This final layer can also be topped with chocolate shavings or powder. Traditionally, Italians consumed this type of coffee at breakfast.

Espresso

To make an espresso, shoot boiling water under high pressure through finely ground coffee beans and then pour into a tiny mug. Sounds simple right? Well, it’s surprisingly difficult to master. Espressos are the purest coffee experience you can get, and while they’re not for everyone, it can be a truly singular drinking experience when you find a good brew.

Flat White

The two most Kiwi coffees available are the long black and the flat white – as both originated in New Zealand and Australia. For a flat white, the steamed milk from the bottom of the jug (which is usually not so frothy, but rather creamy) is poured over a shot of espresso. It is now popular among mums and dads at school fetes who are desperately trying to stay awake.

Long Black

Hot water is poured into a cup, and then two shots of espresso are poured into the water. If you do the inverse of this, it will result in an Americano. Long blacks can be quite strong, and have more crema (a creamy foam that tops espresso shots) than an Americano.

Macchiato (also known as a Piccolo Latte)

A macchiato is a shot of espresso that is then topped off with foamed milk dashed directly into the cup. Although it may sound similar to a cappuccino, it’s usually stronger as there’s no steamed milk added and it’s also smaller, usually served in an espresso-sized cup.

Mochaccino

A ‘mocha’ is just a latte with added chocolate powder or syrup, sometimes topped with whipped cream. If anything, this is a good entry level coffee – living in the worlds between the childlike hot chocolate and the adult café latte.

Filter Coffee

Once the long black sheep of the coffee family, recently filter coffee has made a comeback, and has become a trendy tipple, especially if it’s cold brewed. Ground coffee beans are left to steep in either hot or cold water, then filtered out, leaving the liquid behind. The result is less harsh and bitter than espresso, but less watery than an Americano, and can be drunk black or with milk.

Irish Coffee

Too many of these and you might have to ‘just crash here, bro’, because this type of coffee is made with Irish whiskey, sugar, and a thick layer of cream on the top – and isn’t readily available in New Zealand cafes due to its alcohol content. They’re more often found in restaurants. Be warned, trying to make this with scotch and instant coffee doesn’t work … trust us.

Vienna

A Vienna is made by mixing two shots of strong espresso, and then adding whipped cream as a substitute for milk and sugar. The Vienna melds the strong flavours of a straight espresso, with the smoothness of sugary cream.

Affogato

Affogatos aren’t a coffee at all, really, as they’re a shot of espresso poured over a dessert (usually ice cream). That doesn’t make them any less delicious, though.

Instant

Okay, some caffeine snobs will turn their nose up at this one, but if you’re hiking or camping, or for emergencies at home, instant coffee is still better than no coffee! Instant coffee is coffee that’s had all the water removed, leaving behind just the soluble coffee flavour. Add the water back and, hey presto, something that tastes a bit like coffee!

Regardless of which type of coffee you drink, the cost of buying a cup of joe does add up. Every internet article ever written about easy ways to save money includes cutting out your daily bought brew. And, yes, we’re just as guilty of overusing the tip here at Canstar! And why? Because it does work, $5 per day five days a week soon adds up … to $1300 per year, to be exact, money you could put towards buying something less frivolous, like a first home, for example.

Which leads us nicely to … if you’re looking to buy a first home, or any home, Canstar’s here to help. Click below to compare home loan rates for free!

Types Of Coffee: 12 Different Types of Coffee Explained

Coffee is that one beverage which is the most consumed around the world, after water. The fact that it comes with so many options and flexibility in brewing techniques makes it so popular among people. You could enjoy a plain coffee equally as a frappuccino or even make a combination of ice cream with coffee. You could have a cup of espresso every morning which might suit your taste buds but there are also other ways enjoying coffee that we will share with you in great detail in this article. Everything you need to know about the different types of coffee is right here and you are at the right place. At the end of it you will be able to differentiate well between different types of coffee and you will no more be confused about which coffee to order next time you are at your local coffee shop.

Types Of Coffee

The two reasons why two different types of coffee tastes different is because of the difference in their brewing method and the way the coffee beans are grounded. There are different ways of brewing coffee that gives it its distinct flavour and smell. Here is a list of 13 of the most popular coffee drinks out there, that we are sure you have heard of.

Espresso

Espresso is a form of concentrated coffee that is usually served as shots. All espresso based drinks have three common ingredients: espresso, steamed milk and foam. The process of making espresso is called pulling a shot in which hot water is pressurized and poured over finely grounded coffee beans. All espresso have cream in them which is the froth over it in brownish-red color and gives the rich flavor and smell to the coffee.

Aforementioned, espresso is served in shots and regardless of how big or small the size be, they are served in demitasse cups that hold 2 to 4 ounces of espresso per serving. It usually takes 3 to 5 minutes to make an espresso shot, made with finely grounded coffee beans and lukewarm water. The coffee beans are finely grounded and then some amount of water is added to it to strengthen the taste of the coffee.

Cafe Latte

Cafe latte is made with espresso and steamed milk of which, one third is espresso and two third is steamed milk and also consists of at least a centimeter of foam. It is an Italian coffee-based drink that is now enjoyed by people worldwide and is similar to the French drink cafe au lait. In Italian, cafe latte means coffee and milk, which defines the purpose of how it is prepared.

Latte is served in a 8 ounce glass or cup that consists of a shot of espresso which will be about 30 ml and then poured over with steamed milk and thick foam of about half an inch on the top layer. The ratio of coffee to steamed milk in the mixture is 1:1. Latte tastes similar to a cappuccino with the only difference that the amount of milk foam in a cappuccino is about three-fourth inch. It takes approximately 5 minutes to brew a cup of cafe latte.

Frappuccino

Frappuccino is a signature drink of Starbucks but is now available in almost all local coffee shops. The essential ingredients in a frappuccino are ice, espresso, whole milk, and flavored syrup. It takes somewhere between 5 to 10 minutes to prepare it. The best part about this drink is that it is topped with a large and thick whipped cream, adding the right amount of sweetness to this drink.

To brew frappuccino, grind the coffee beans finely and let the grounded coffee cool for sometime at room temperature. After it has cooled down, add sugar, milk and flavored syrup in the blender as per your taste preference and mix it for about 20 seconds. Then add ice to it and pour it in a glass or tall cup and add whipped cream to it if you want to.

Cafe Mocha

Cafe mocha is a blend of hot chocolate and cappuccino that is prepared by mixing chocolate powder with an espresso shot, which is then mixed with skimmed steamed milk, foam and whipped cream. For this process, you will need one espresso shot, one spoon of chocolate powder, half a cup of steamed milk and 2-3 cm of microfoam.

It takes approximately 15 minutes to prepare cafe mocha. Mocha is an American coffee drink which is similar to cafe latte with the only difference that chocolate syrup and/or chocolate powder is added to it. Alike cafe latte, cafe mocha is also an espresso based drink that is also referred to as hot chocolate. Sometimes they are also served with whipped cream and marshmallows and dusted with cinnamon powder.

Caramel Macchiato

Caramel Macchiato is a signature drink of Starbucks that is similar to Frappuccino in taste and can be brewed in close to 5 minutes. It is perfect for parties or for an evening tea session. The ingredients needed to make caramel macchiato are cold milk, caramel sauce, 2 shots of strongly brewed espresso, vanilla syrup and lots of ice.

Add the two espresso shots along with milk, vanilla syrup and ice in a cup and blend it to create a smooth texture. Once the texture is created, add caramel sauce on the top of it and your caramel macchiato will be prepared. If you want to make three layers in the macchiato, add cold milk and foam on top of the espresso and then swirl the cup a few times to mix the espresso with the milk.

Turkish Coffee

Turkish coffee, also known as Oriental coffee, is a popular beverage that is enjoyed throughout the Middle East. It is made in a long handled pot which is mostly made of copper or brass and is called cezve or ibrik. Ibrik or cezve is usually a long handled pot that comes with a narrow neck and a wider bottom. One rule of thumb for making this exotic drink is to ensure that your coffee is finely grounded – they cannot be coarse.

Turkish people mostly use a brass grinder to grind the coffee beans which is expected to be as fine as caster sugar. This coffee is typically drunk from small cups, which is called Finjan. The coffee making process is only complete when the powder has fully settled at the bottom of the cup. A lot of people prefer using Arabica beans while brewing Turkish coffee but the choice of coffee beans is not really a matter of concern as long as it is medium roast since you have to roast it again through the process of brewing the coffee.

Americano

Americano is a coffee drink that is brewed by adding hot water to espresso and giving it the same strength as that of an espresso shot but different in flavour from traditional coffee. How strong you prepare the americano depends on the number of espresso shots you add to it and also the quantity of hot water to it. In Italy, even filtered coffee is added in lieu of hot water with the espresso shot.

It takes not more than 2-4 minutes to prepare americano and there is nothing much you need except espresso shots and hot water. Americano is a strong drink which might not be preferred by all so if you want to make the taste sweet you could also add sugar or some flavoured syrup to it depending on your taste. All espresso-based drinks usually use steamed or cold milk to them but the same is not the case with Americano as hot water is used in place of milk.

Irish Coffee

Irish coffee is a type of hot coffee that consists of whiskey, hot double espresso and sugar, topped with thick cream. You are supposed to drink it through the cream on the top. However, unlike most other coffee drinks, Irish coffee does not use whipped cream on the top. It is not however the same as Bailey’s coffee which replaces milk and cream with Bailey’s drink.

Preparing Irish coffee takes close to 10 minutes. All you need to do is warm the glass and add whiskey to it and then mix it with sugar and hot double espresso. Once it is stirred well, add thick cream on the top as per your taste. This drink is usually served as a cocktail drink after dinner and usually in winter or autumn nights.

Cafe Cubano

Cafe cubano is a Cuban coffee drink which is made out of espresso and is typical to the Cuban drinks. The espresso shot is used as the base for this drink and is then sweetened after brewing it. It twice stronger than the taste of Americano. This drink is used as a part of the morning ritual for the Cubans. It takes close to 10 minutes approximately to prepare this drink. All you need is an espresso shot, a cup of water and 4 to 6 teaspoons of sugar to brew it.

Add sugar as per your taste with the espresso shot in a demitasse cup. Now brew it just like you normally brew coffee and let the sugar caramelize well in the drink. The coffee beans used in this drink has to be dark roasted ones.

Cappuccino

Cappuccino is an Italian coffee drink that is made by mixing double espresso shots with steam milk foam. You could even use cream in place of milk in case you want to make the drink thick. The steamed milk is poured on top of the espresso shot and is then topped with whipped cream or thick milk foam. In a traditional cappuccino, the amount of espresso in the mix is 150 ml while the quantity of milk is 180 ml.

It takes approximately 10-15 minutes to prepare a glass or cup of cappuccino. It is similar to cafe latte but is smaller in size, but the froth is thicker. To prepare a cup of cappuccino, add a shot of espresso in a cup and pour steamed milk over it. Now add up to 2-3 cm of foam over the steamed milk. You could sprinkle chocolate powder over it if you want, or even add whipped cream over it, depending on your preference in taste.

Cortado

Cortado is a much loved coffee drink in Portugal, Spain and Latin America, and is usually enjoyed as an afternoon drink. This drink is prepared with espresso and steamed milk, to decrease the level of acidity in it. This drink is similar to Macchiato but the milk that is used to prepare it is slightly cooler than macchiato, but the amount of milk in it is of the same level as that of macchiato. The amount of time required to prepare it is 3 minutes.

To prepare Cortado is pretty simple! Put the espresso in the cup and add steamed milk to it and it will be ready to be served.

Affogato

Affogato is an Italian dessert coffee that is a mix of espresso and gelato. It consists of single or double shot of espresso along with a large scoop of vanilla ice cream. It is an ideal drink for summers or after dinner. Preparing it does not take a lot of pain. You need to add a large scoop of vanilla ice cream in a glass of milk and then pour a single or double shot espresso over the ice cream and your dessert coffee will be ready to be served.

The Italian word Affogato means “drowned” which means drowning ice cream and espresso in a pool of steamed milk. Today it is a part of American culture as well and is gaining great popularity around the world. Starbucks too has its line of affogato drinks that comes in many flavours and variety.

Plain Coffee

Nothing beats the taste of plain coffee. It is basic compared to all the other coffee drinks in this list but is the most widely consumed all over the world. It does not take more than 5 minutes to prepare coffee but brewing good old plain coffee is an art of its own. All you need is freshly and finely grounded coffee and water and mix them well in steam. You could choose to add milk too to it but that depends entirely on you.

There is no ideal time, season or hour of the day to consume coffee – it can be enjoyed at any point of time. Some people cannot even start their day without having coffee. Plain coffee has a place of its own and no matter how fancy you try to make an espresso or coffee drink – it is unbeatable compared to a cup of plain and simple coffee.

Conclusion

This list does not end here when it comes to the different types of coffee but these are the most popular ones that is enjoyed by people all across the globe. We are hoping this list has been a convenient one for you to understand what the different coffee drinks are and how they are prepared. Another thing that you need to know is the two types of coffee beans that are used to make coffee: arabica and robusta.

Arabica coffee beans are typically grown in places with higher altitude such as Costa Rica or Colombia Or Kenya, Brazil hence there flavour is of high quality. These coffee beans are dense and are considered of extremely fine quality which is why they are really popular with most coffee lovers. On the other hand, robusta coffee beans are grown in places with lower altitude and they level of caffeine in them is quite high which is why they are less popular among the masses. They are also bitter in taste and the beans are softer compared to arabica coffee beans and is preferred by those who like strong coffee. The taste in your coffee will entirely depend on the coffee beans you use and how finely or coarse you ground them.

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