COMMODITIES HELD BY BROKER

6 Months Ended

Apr. 30, 2021

Brokers and Dealers [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.

The Company has open position contracts held by the broker, which are summarized as follows:

	April 30, 2021		October 31, 2020
Option Contracts	$	53,158	$	(164,475	)
Future Contracts		53,925		(287,850	)
Total Commodities	$	107,083	$	(452,325	)

The Company classifies its options and future contracts as trading securities and accordingly, unrealized holding gains and losses are included in the statement of operations as a component of cost of sales 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,
	2021		2020
Gross realized gains	$	241,125	$	485,344
Gross realized losses		-		(668,114	)
Unrealized gain		144,333		666,901
Total	$	385,458	$	484,131

	Six Months Ended April 30,
	2021			2020
Gross realized gains	$	503,112		$	841,903
Gross realized losses		(76	)		(794,925	)
Unrealized gain (loss)		559,408			(318,936	)
Total	$	1,062,444		$	(271,958	)

COFFEE HOLDING CO., INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

APRIL 30, 2021

(UNAUDITED)