| rupert - 11/23/2014 20:09
Can someone give me a run down on how a farmer could incorporate selling options into his marketing plan? Im not talking about speculating but as a hedge. I really cant see how it would work out as a hedge. It seems selling puts/calls would be a good way to raise capital but when you get on the wrong side of the market you could get burned pretty bad. Im open for an education.
You could get burned pretty bad selling puts, but calls you have unpriced grain in the bin or field to hedge it. If you're happy with unpriced grain in the bin, with an open order to sell it higher, you'd be happier holding a short out of money call instead? Maybe you're not holding a hedging or speculating position in the meantime, either way, and there's no sense arguing about it? Im open for an education also. Heck I think I might try it, not now though, I think they're going higher FWIW. |
farmers selling options????
