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SW MN - mt. lake/windom | About 16-18 months ago I put some fixed positions on lean hogs. This spring as LH started to rally, margin management indicated that I could be at risk for some extreme margin calls. I used calls to open up my top side as a margin management tool that proved to be important. Anyways what I did is rolled calls 2-3 times to keep current and harvest premiums. Comes at a cost by only obtaining 75-80% of value in roll-ups but may be a compromise approach to still be able to capture upside potential if rally continues and if at top your roll-up ultimately lifted positions off but only for 75-80% of full potential. In my particular case, I would have been better off not rolling positions since june/july didn't drop below last roll-up. For me, it was hard to pass on known returns if only 75-80% of full potential vs. unknown of losing all. Just an idea, may fit your style, may not. | |
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