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Leesburg, Ohio | An HTA simply sets the futures price for grain to be delivered and not the basis price (the difference between the futures, or "Board of Trade" price and the local cash bid.) Rolling an HTA should be simply a matter of paying (or getting) the difference between the futures price of the month you are contracted in, versus the futures price of the month you want to roll to, plus paying whatever fee your elevator charges for the roll (normally a penny or two).
HTA's are a very viable pricing tool. They unjustly got a bad name in the 80's, only because alot of abusers forgot about the "arrive" part of the "Hedge-to-Arrive". They just didn't deliver. That's not a bad marketing tool, that's bad users. | |
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Would someone care to explain...
