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Frytown, Iowa | Wanting to learn more about these... Going to list positives and negatives for each. If you can give me other positives or negatives I would appreciate it.
Hedge to arrive: positive is you can lock in a board price without a margin call, negative is the end user no longer has to bid for your grain through basis and delivery is constrained to the assigned month...
Basis contract: positive is you can get best bids for basis, negative is assigning delivery to a month...
Board hedge: positives are locking in price and keeping basis bids open for anytime. Negatives are margin calls
From my understanding, if you can mentally handle margin calls that is the best option... Second best is a basis contract, can you find a negative about basis contracts?
I have done HTA before because it's nice to not worry about margin calls but it seems like its the least in your advantage of these 3 because of basis bids and your contracted into a delivery timeframe...
What do you use most?
Care to add positives and negatives?
Other options?
Obviously the best option is bring home and feed to your own livestock... | |
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HTA vs basis contract vs board...
