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Southwest Minnesota | I'm thinking about locking in some grain prices for 2009 corn.
I've been advised to
buy a Dec 09 5.00 put ($.70 today)
and sell Dec 09 6.00 call ($.45 today)
I was told that I would be guaranteed $4.75-$5.75 depending what the market did. I'm thinking isn't there some time value in these options that I will loose(not sure exactly how it works). What would be a worst case senario?
What do you guys think? What would the possible outcomes be?
Another person told me to just buy the put. I'm a novice at trading options so just looking for some insight.
Thanks. | |
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