COMMODITIES HELD BY BROKER

6 Months Ended

Apr. 30, 2022

Broker-Dealer [Abstract]

COMMODITIES HELD BY BROKER

NOTE 4 - COMMODITIES HELD BY BROKER:

The Company has used, and intends to continue to use in a limited capacity, short term coffee futures and options contracts primarily for the purpose of partially hedging and minimizing the effects of changing green coffee prices and to reduce our cost of sales. The commodities held at broker represent the market value of the Company’s trading account, which consists of options and future contracts for coffee held with a brokerage firm. The Company uses options and futures contracts, which are not designated or qualifying as hedging instruments, to partially hedge the effects of fluctuations in the price of green coffee beans. Options and futures contracts are recognized at fair value in the condensed consolidated financial statements with current recognition of gains and losses on such positions. The Company’s accounting for options and futures contracts may increase earnings volatility in any particular period. We record all open contract positions on our consolidated balance sheets at fair value in the due from and due to broker line items and typically do not offset these assets and liabilities.

The Company classifies its options and future contracts as trading securities and accordingly, unrealized holding gains and losses are included in earnings and not reflected as a net amount as a separate component of stockholders’ equity.

The Company recorded realized and unrealized gains and losses respectively, on these contracts as follows:

	Three Months Ended April 30,
	2022			2021
Gross realized gains	$	1,000,908		$	241,125
Gross realized losses		(878,440	)		-
Unrealized gain		179,213			144,333
Total	$	301,681		$	385,458

	Six Months Ended April 30,
	2022			2021
Gross realized gains	$	1,323,048		$	503,112
Gross realized losses		(1,257,359	)		(76	)
Unrealized gain (loss)		112,446			559,408
Total	$	178,135		$	1,062,444

COFFEE HOLDING CO., INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2022

(UNAUDITED)