|
lizton IN | A hedge account is set up for marketing the grain or livestock you grow. There is a phiscal something for the off setting paper trading. This year looks like a good example of hedging. You could sale 100% of your crop on paper when the price is high. Where in the growing world you don't dare do that. This will be one place the old saying is true "a little knowledge is a dangerous thing"
As you have read this year a lot of people hedge beans in the $9.?? Something range. Then got to make margin calls up to $11.60ish. So for every bean contract they sent $10,000 ish up to Chicago. Now on the up side the beans they were growing went up in value so they off set.
Start slow you will find out how Wild the markets can be and the phone will ring wanting money. That is part of it.
The one thing most new traders do. Is they lift the hedge because they were wrong. Then the market turns around and they don't have the hedge on and loose big. I am guess that happened this year. If you make a hedge be ready to stick with it. Or if you get out of one make sure you have a plan on how to get back in.
The other problem you don't want to do is have more bought or sold then you grow. It is eather a quick way to riches if your right or a farm sale if your wrong.
Keith | |
|
Started my brokerage account. naive Qs
