northern edge of north central Missouri | FarmingMo - 2/7/2024 12:38
Every time you roll a basis contracts the spread is deducted from your basis. So to get to may his basis would go to -.14 (his basis minus current spread). And he would have a roll fee also. To get to july contract he would lose another .09 plus a roll fee. So his basis against july would be -27 to -.30 depending on what they charge for roll fees. So the market would have to rally that much just for him to break even compared to the current price
No. The price of the contract he rolls to must hold even to break even (plus the roll fee if any). If May futures go up from that moments price, he gains. If May futures price goes down from that moments price, he loses. Basis is irrelevant. |
basis contracts
