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Northwest Iowa | I don't think your price on a 3.30 Dec call is right. Did you mean put? Your plan looks a little complicated, a lot of different items to keep track of. Not that it won't work but you asked. I had some customers when I had a commodity office that would sell a call and buy a put for price protection. Keeping to the simple plan, my rule of thumb was each option would be .50 away from the where the futures were trading. In beans I liked $1 on each side. This obviously worked best when you could see that a swing high was near. Actually worked pretty good. When the call that had been written got down to a few pennies, get rid of it and keep the put. There are innumerable ways to view option strategies. Then start talking about watching the delta to see if they are fairly priced! Good luck. | |
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New crop corn hedge
