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| A constructive question, the net downside risk is fairly obvious, unlimited minus premium. There's some net upside gain in a higher market, must be about 50% of the underlying gain? Margins on the option won't be as high as gain in the underlying market? if you keep rolling up to stay near "at the money"? But if you just margin that position, there's no net gain in the end over premium revenue? In soybean example above, market moves to 15, if rolling short option, probably be able to net 13ish rather than just 11 net?
Edited by SquareG 11/25/2014 14:29
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farmers selling options????
