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| Well, here's the deal as I see it. Cowboycorn and Midlander already alluded to the problem. The problem is, as the margin calls come in(if they do) you can't get any money out of your option unless you sell it. In other words, you have one shot. At that point you are out of the game, or you have to purchase another call. Also, as already alluded to, the option won't move at the same rate as the futures, so you will still be out some margin money. If you want to hedge production, sell it, and buy a call. This protects your bottomside and leaves the top side "open" minus the cost of the call. Most calls are very expensive right now. If you are trying to protect a speculative position, good luck.
Edited by Pofarmer 12/14/2007 21:56
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